Impact of Eurozone Financial Shocks on Southeast Asian Economies
Menon, Jayant; Ng, Thiam Hee | August 2013
Abstract
Five years after the Global Financial Crisis, the economies of the United States (US) and the eurozone continue to struggle. How will Southeast Asian economies be affected should there be a further deterioration in conditions in the eurozone? In this paper, we present estimates using a Global Vector Autoregression model of the direct impacts in Southeast Asia of a further shock to the eurozone. We find that although the direct impacts are likely to be muted, it could trigger a much larger adjustment should it lead to a reassessment of risks and asset valuations. This is a real possibility given that vulnerability in the region has increased following massive inflows of capital and the build-up of debt related to successive bouts of quantitative easing, initially in the US and now in Japan. In light of a possible reassessment of risks and asset valuations, and with the International Monetary Fund’s resources already stretched, there is a pressing need to improve regional financial safety nets, which are currently unworkable, to deal with the fallout.
Citation
Menon, Jayant; Ng, Thiam Hee. 2013. Impact of Eurozone Financial Shocks on Southeast Asian Economies. © Asian Development Bank. http://hdl.handle.net/11540/2087. License: CC BY 3.0 IGO.Keywords
Project Evaluation & Review Technique
Evaluation Strategies
Evaluation Criteria
Impact Evaluation
Risk Financing
Infrastructure Financing
Financial Risk Management
Financial Crisis
Environmental impact assessment
Needs assessment
Cost benefit analysis
Capital Needs
Insurance Companies
Financial Emergency
Project Risks
Development Banks
Ecological risk assessment
Environmental impact statements
Cumulative effects assessment
Environmental impact analysis
Risk assessment
Country finance
Catastrophe bonds
Insurers
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Citable URI
http://hdl.handle.net/11540/2087Metadata
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