Structural Reform, Intra-Regional Trade, and Medium-Term Growth Prospects of East Asia and the Pacific --- Perspectives from a new multi-region model

Papa N'Diaye, Ping Zhang and Wenlang Zhang
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Papa N'Diaye: International Monetary Fund
Ping Zhang: External Department, Hong Kong Monetary Authority
Wenlang Zhang: Research Department, Hong Kong Monetary Authority

No 817, Working Papers from Hong Kong Monetary Authority

Abstract: This paper analyses the potential benefits from reforms aimed at promoting domestic demand in the region, as well as the effects of slower growth in the United States and the G3 on EMEAP economies.The analysis is based on simulation scenarios using an expanded version of the IMF Global Integrated Monetary and Fiscal (GIMF) model. The GIMF model is particularly useful for conducting medium-term policy analysis, because it incorporates rich layers of intra-regional trade, production, and demand that allow the transmission mechanism of structural reforms and external shocks to be fully articulated. The simulation results show that reforms to rebalance the pattern of demand in regional economies (such as Mainland China) more towards domestic demand could entail non-negligible benefits for the EMEAP. These benefits could be even larger for those economies that more flexibly adjust to the shift in China's trade pattern. The simulation results also illustrate structural reforms in EMEAP economies will allow them to reduce vulnerabilities to economic downturns in the major advanced economies.

Keywords: GIMF model, Slowdown; Demand rebalancing; Confidence effects (search for similar items in EconPapers)
JEL-codes: E2 E6 F4 O4 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2008-12
New Economics Papers: this item is included in nep-cmp, nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hkg:wpaper:0817

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