Are the East Asian Economies Decoupling? Empirical Evidence and Rhetorical Reasoning


  • Werner Pascha
  • Jihee Yoon



decoupling, East Asia, regional integration, financial crisis, business cycles


In this article, the authors look at the decoupling debate with respect to East Asia from an economic and a political economy perspective. Looking at various methods, they find little evidence to support a secular decoupling hypothesis, that is, the proposition that there is a long-term trend towards a decoupling of the East Asian region. In this context, they present fresh evidence on GDP data up to the second quarter of 2009, incorporating some of the impact of the recent financial crisis. They find evidence in favour of a cyclical relationship: decoupling during economic upturns and re-coupling during downturns. They also look at the sources for the strong interest in the concept, drawing some parallels to the older concept of the flying geese pattern of development. Key factors are the activity of financial analysts and the interest of some policy circles in the region to support calls for further regional integration with putative empirical evidence. The debate on decoupling captures some interesting points about the peculiar political and economic exchange on the regional level. Nevertheless, the authors conclude that seemingly detached economic reasoning is often subject to over- and even misinterpretation and should be accompanied by more political economy-based reasoning on the discursive patterns of the debate.

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