Korea’s Trade, Growth of Trade and the World Economy in Post-Crisis ASEAN+3 Free Trade Agreement: An Econometric and Policy Analysis

• Main Authors: Tran Van Hoa, Jel C
• Other Authors: The Pennsylvania State University CiteSeerX Archives
• Format: Text
• Language: English
• Subjects: new Asian regionalism; Free Trade Agreement; extended gravity theory; modelling economic and trade policy; Avian flu
• Online Access: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.484.379; http://www.akes.or.kr/akes/downfile/Tran20Van20Hoa.pdf

The Korean economy had achieved economic ‘miracles ’ in the past, but it currently faces many challenges, economically and politically (Tran Van Hoa, 2002), compounded by a global economic slowdown with hesitant recovery (IMF, 2004), terrorist attacks, regional wars, the SARS and avian flu outbreaks in Asia, and domestic and global uncertainty ahead. The paper introduces the extended gravity theory to construct a simple flexible simultaneous-equation econometric model of Korea trade and growth with its major trading partners, and provides efficient empirical results on its trade-growth causality and trade determination over the past two decades. Based on these findings, economic policy challenges are then targeted for study and solution development.