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Interdependence of Production and Income in Asia-Pacific Economies:

An International Input-Output Approach

November 2007
Tomoko Mori*1
Hitoshi Sasaki*2

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In this paper, we investigate interdependencies between Asia-Pacific economies by using the Asian International Input-Output Table. The results of production inducement analysis show that the production inducement coefficients of many Asia-Pacific countries have recently increased, and in particular production inducements to East Asian countries, especially China, have increased. Thus, interdependencies between Asia-Pacific economies in terms of global production networks deepened further from 2000 onwards through increases in trade in intermediate products. In particular, China plays a more important role than ever as the main production center in the Asia-Pacific region. Moreover, the degrees of income dependence between these countries are examined. It is found that East Asian economies have not necessarily become more autonomous than before in terms of their income dependence. Rather, their economic structure still tends to be affected by economic developments outside the region.

Asian International Input-Output Table, production inducement coefficient, degree of income dependence.

JEL Classification Number:
C67, F15

We are especially grateful to Yasuko Takahashi Matsushita for her capable assistance. We also thank Toshio Idesawa, Satoshi Inomata, Seisaku Kameda, Shigeto Nagai, Ko Nakayama, Nobuyuki Oda, Toshihiro Okada, Hideaki Ono, seminar participants at the International Department of the Bank of Japan and the Bank of Japan CeMCoA EMEAP Economist Workshop 2007 for their helpful comments and suggestions. Of course, we are solely responsible for any remaining errors in this paper. The views presented in this paper are those of the authors, and not those of the Bank of Japan.

  • *1 International Department, Bank of Japan
  • *2 International Department, Bank of Japan
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