Economic Linkages Between Japan and East Asian NIEs: An Empirical Study

2 Abstract A sustained recovery of the Japanese economy is generally considered vital for the sustained recovery of East Asian newly industrialising economies (NIEs). The underlying assumption is that Japan is a significant engine of growth in East Asia. The primary objective of our study is to use cointegration analysis of real GDP time series to examine growth linkages between the Japanese economy and four East Asian NIEs – Korea, Indonesia, Malaysia and Singapore. Our main empirical finding is that Japanese performance has at most only a limited impact on the performance of the four other economies.