Asian Holdings of US Treasury Securities: Trade Integration as a Threshold
Terada-Hagiwara, Akiko | December 2008
Abstract
This paper empirically investigates if there have been any shift in regime with
Asian holdings of long-term United States (US) Treasury securities, with particular
attention paid to the role of growing regional integration in trade. A panel
regression estimation of eight Asian countries for 1998–2004 confirms the striking
persistency of the portfolio weight of US Treasury securities. It also reveals,
without surprise, that the traditionally strong trade link with the US, as well as the
exchange rate regime, explain the observed upward deviation of US Treasury
securities from what is warranted by its market share. What is interesting,
however, is that the estimated regime switches, as found when examined with a
threshold estimation. The paper finds three thresholds that divide the sample into
four regimes—a decreasing persistency as the intraregional trade link becomes
tighter.
Citation
Terada-Hagiwara, Akiko. 2008. Asian Holdings of US Treasury Securities: Trade Integration as a Threshold. © Asian Development Bank. http://hdl.handle.net/11540/1519.ISSN
1655-5252
Keywords
Economics
Public Sector
Free Trade
Health
Trade
Development
Economic integration
Regional integration
Industry
Cooperation
Free Trade
Poverty
Economics
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Citable URI
http://hdl.handle.net/11540/1519Metadata
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