ABSTRACT
This chapter presents the methodological issues regarding trade research. It discusses the formulation of new trade variables and the methodological concerns of autocorrelations, diagnostic tests for autocorrelations, and correction of autocorrelation. After discussing the concept formation and the concerns of autocorrelations, the chapter outlines the empirical methods in order to provide a guideline in analyzing international trade relations. In analyzing the trade relations between the Pacific Basin Newly Industrializing Countries and the United States (US), the chapter offers a conceptualization of trade disputes, as a new indicator of US import policy. There are four possible types of analyses based on the stationary of series and on the presence/absence of autocorrelation: stationary series with no autocorrelation, non-stationary series with no autocorrelation, stationary series with autocorrelation, and non-stationary series with autocorrelation. The formation of trade disputes is based on the assumption that trade disputes are filed as petitions with to the United States International Trade Commission.
