The 2008 financial crisis and potential output in Asia: Impact and policy implications
Monitoring the behavior of potential output helps policymakers implement appropriate policies in response to an economic crisis. In the short-run, estimates of the output gap can guide the timing of the implementation and withdrawal of stimulus measures. In the medium- to long-term, these estimates...
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oai:animorepository.dlsu.edu.ph:faculty_research-87462023-01-09T23:42:25Z The 2008 financial crisis and potential output in Asia: Impact and policy implications Park, Cyn-Young Majuca, Ruperto P. Yap, Josef T. Monitoring the behavior of potential output helps policymakers implement appropriate policies in response to an economic crisis. In the short-run, estimates of the output gap can guide the timing of the implementation and withdrawal of stimulus measures. In the medium- to long-term, these estimates can also provide the basis for gauging productive potential and, hence, guide policies to support sustainable, non-inflationary output growth. In this paper, we investigate the post-crisis behavior of potential output in emerging East Asian economies by employing the Markov-switching model to account for structural breaks. Results show that after the 1997/98 Asian financial crisis, potential output in Hong Kong, China; the Republic of Korea (Korea); Singapore; and Malaysia reverted to levels consistent with trends prior to the crisis. While there were permanent drops in potential output for both Thailand and Indonesia, growth rates returned to pre-crisis trends. The People’s Republic of China (PRC); Taipei,China; and the Philippines are special cases as explained in the report. Econometric estimates of a simple growth model show that the differences among the patterns of post-crisis recovery can be attributed to the investment-to-gross-domestic-product (GDP) ratio; macroeconomic policies; exchange rate behavior; and productivity, which is proxied by the level of technological activity. These results can be used to guide policy in the aftermath of the 2008 global financial crisis. 2011-08-01T07:00:00Z text https://animorepository.dlsu.edu.ph/faculty_research/7979 Faculty Research Work Animo Repository Asia—Economic conditions Financial crises—Asia Global Financial Crisis, 2008-2009 Economic development—Asia Economics |
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Asia—Economic conditions Financial crises—Asia Global Financial Crisis, 2008-2009 Economic development—Asia Economics Park, Cyn-Young Majuca, Ruperto P. Yap, Josef T. The 2008 financial crisis and potential output in Asia: Impact and policy implications |
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Monitoring the behavior of potential output helps policymakers implement appropriate policies in response to an economic crisis. In the short-run, estimates of the output gap can guide the timing of the implementation and withdrawal of stimulus measures. In the medium- to long-term, these estimates can also provide the basis for gauging productive potential and, hence, guide policies to support sustainable, non-inflationary output growth. In this paper, we investigate the post-crisis behavior of potential output in emerging East Asian economies by employing the Markov-switching model to account for structural breaks. Results show that after the 1997/98 Asian financial crisis, potential output in Hong Kong, China; the Republic of Korea (Korea); Singapore; and Malaysia reverted to levels consistent with trends prior to the crisis. While there were permanent drops in potential output for both Thailand and Indonesia, growth rates returned to pre-crisis trends. The People’s Republic of China (PRC); Taipei,China; and the Philippines are special cases as explained in the report. Econometric estimates of a simple growth model show that the differences among the patterns of post-crisis recovery can be attributed to the investment-to-gross-domestic-product (GDP) ratio; macroeconomic policies; exchange rate behavior; and productivity, which is proxied by the level of technological activity. These results can be used to guide policy in the aftermath of the 2008 global financial crisis. |
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Park, Cyn-Young Majuca, Ruperto P. Yap, Josef T. |
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Park, Cyn-Young Majuca, Ruperto P. Yap, Josef T. |
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Park, Cyn-Young |
title |
The 2008 financial crisis and potential output in Asia: Impact and policy implications |
title_short |
The 2008 financial crisis and potential output in Asia: Impact and policy implications |
title_full |
The 2008 financial crisis and potential output in Asia: Impact and policy implications |
title_fullStr |
The 2008 financial crisis and potential output in Asia: Impact and policy implications |
title_full_unstemmed |
The 2008 financial crisis and potential output in Asia: Impact and policy implications |
title_sort |
2008 financial crisis and potential output in asia: impact and policy implications |
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Animo Repository |
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2011 |
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https://animorepository.dlsu.edu.ph/faculty_research/7979 |
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