Is East Asia decoupled from the US?

Abstract

Since the Asian Financial Crisis, there have been a lot of restructurings and reforms implemented in the East Asian countries. Thanks to all those changes, East Asia is now more dynamic and resilient than ever. As a result, there were many arguments that East Asia would start to decouple from the United States as the countries in the region become more and more dependent on the emerging markets of China and Korea, and as demand became more robust, made possible by the economic boom in the region. The issue of East Asia’s decoupling from the US arose once again in the recent financial crisis, from which East Asian countries have recovered quickly as compared with a slowing US economy.This project aims to look through the increasingly popular hypothesis that East Asian economies are "decoupling" from the United States. We will analyse both supportive and opposing viewpoints revolving around this hypothesis qualitatively. In addition, an empirical econometric model which depicts the relationship between East Asian exports and the US economy will be exploited to determine whether the “decoupling” process is under way or not.