IS THE EAST ASIAN TRADE BLOC MERELY A PAPER TIGER?

This article presents the analytical findings of economists Jeffrey Frankel of the University of California and Shang-Jin Wei of Harvard University on Japan's plans for the creation of a de facto trade bloc in East Asia. These economists suggest that Americans and Europeans need not fear of Japan's economic supremacy in creating Wast Asia the world's fastest growing region by means of cementing trade ties. Their analysis, summarized in a recent issue of the Federal Reserve Bank of San Francisco's periodical "Weekly Letter," shows scant evidence of a developing Pacific economic bloc dominated by Japan. These economists found that from 1979 to mid-1992, the major East Asian countries all consistently assigned a heavy weight to the dollar in valuing their currencies.