A Neoclassical Analysis of the Asian Crisis: Business Cycle Accounting of a Small Open Economy
No 07-E-16, IMES Discussion Paper Series from Institute for Monetary and Economic Studies, Bank of Japan
This paper applies the business cycle accounting method a la Chari, Kehoe and McGrattan (2007) to a standard neoclassical small open economy model and assesses the recent crises in Hong Kong, Korea, Singapore and Thailand. The key common features of these crises are the sudden output collapses and consumption drops as large as the output drops. Quantitative results show that the sudden drops in total factor productivity are important in explaining the output drops. Distortions in the foreign debt market are important in Korea and Thailand whereas distortions in the domestic capital market are important in Hong Kong and Singapore in explaining the large consumption drops.
Keywords: Business Cycle Accounting; Small Open Economy; Asian Crisis (search for similar items in EconPapers)
JEL-codes: E13 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-dge, nep-mac and nep-sea
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Journal Article: A Neoclassical Analysis of the Asian Crisis: Business Cycle Accounting for a Small Open Economy (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ime:imedps:07-e-16
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