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Global and Regional Shocks: Challenges to Asian Economies

dc.contributor.authorKwanho Shin
dc.date.accessioned2015-04-10T10:16:36Z
dc.date.available2015-04-10T10:16:36Z
dc.date.issued2008-11-15
dc.identifier.urihttp://hdl.handle.net/11540/3708
dc.description.abstractTwo major economic problems are currently shadowing Asian economies. On the one hand, the slowdown in the US economy, ignited by the subprime mortgage crisis, may not be confined to the US region and may affect Asian countries as well. On the other hand, the recent fuel and food price increases, a global shock in nature, are also likely to influence most Asian economies that are heavily dependent on oil imports. In this short article, by summarizing recent studies on these issues, I address how Asian economies in particular are challenged by these important developments in the world economy. I also identify policy issues faced by the policymakers in Asia. Recent studies show that East Asia is quite integrated in trade. Financial integration has also progressed, but the extent of financial integration is not as remarkable as trade integration has been in the region. By contrast, East Asian countries’ financial links to the global center (i.e., the US market) are quite strong. These studies have also shown that trade integration greatly enhances business cycle co-movements of output. There is also evidence that financial integration also leads to more co-movements of output, but its impact is relatively weak. Hence, the deepening trade integration in East Asia indicates that the impact of slowdown in the US economy is not likely to be large. Since the impact of financial integration is not large, the fact that most Asian countries’ financial markets have strong ties with the US financial market does not necessarily dispute this prediction. However, since most studies are based on non-crisis periods, there is a possibility that the financial crisis that originated in the US, if it is very severe, may generate a much larger influence on Asian countries. On the other hand, the recent fuel price increases are of a more global nature. Most Asian countries, still heavily dependent on the manufacturing sector, are expected to be more adversely affected by the oil price increases than advanced countries will be. If these increases continue, the central banks of Asian countries will face a dilemma of high inflation or economic slowdown. Of particular interest is that this will be the first serious challenge for many emerging Asian countries that have adopted inflation targeting.
dc.languageEnglish
dc.publisherAsian Development Bank
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.titleGlobal and Regional Shocks: Challenges to Asian Economies
dc.typeWorking Papers
dc.subject.expertAid And Development
dc.subject.expertAsian Development Bank
dc.subject.expertComprehensive Development Framework
dc.subject.expertDevelopment Cooperation
dc.subject.expertDevelopment Management
dc.subject.expertDevelopment Planning
dc.subject.expertDevelopment Strategies
dc.subject.expertGas Development
dc.subject.expertGas Market Development
dc.subject.expertOil and Gas Industry
dc.subject.expertNatural Gas Industry
dc.subject.expertGas Industry
dc.subject.adbRural planning
dc.subject.adbAid coordination
dc.subject.adbIndustrial projects
dc.subject.adbInfrastructure projects
dc.subject.adbNatural resources policy
dc.subject.adbEducational development
dc.subject.adbGas Reserve
dc.subject.adbGas Distribution
dc.subject.adbOil and Gas Leases
dc.subject.adbNatural Gas
dc.subject.naturalCommunication in rural development
dc.subject.naturalCommunication in community development
dc.subject.naturalEconomic development projects
dc.subject.naturalDevelopment banks
dc.subject.naturalEconomic forecasting
dc.subject.naturalEnvironmental auditing
dc.subject.naturalCumulative effects assessment
dc.subject.naturalHuman rights and globalization
dc.subject.naturalGasoline
dc.subject.naturalNatural gas supply
dc.subject.naturalOffshore oil and gas leases
dc.subject.naturalGas leases
dc.subject.naturalNatural gas reserves
dc.subject.naturalFertilizers and manures
dc.subject.naturalGasoline pump industry
dc.title.seriesADBI Working Paper Series
dc.title.volume120
dc.contributor.imprintAsian Development Bank
oar.themeDevelopment
oar.themeIndustry
oar.themeLabor Migration
oar.adminregionAsia and the Pacific Region
oar.countryBangladesh
oar.countryBhutan
oar.countryIndia
oar.countryMaldives
oar.countryNepal
oar.countrySri Lanka
oar.countryBrunei Darussalam
oar.countryCambodia
oar.countryIndonesia
oar.countryLao People's Democratic
oar.countryMalaysia
oar.countryMyanmar
oar.countryPhilippines
oar.countrySingapore
oar.countryThailand
oar.countryViet Nam
oar.countryCook Islands
oar.countryFiji Islands
oar.countryKiribati
oar.countryMarshall Islands
oar.countryFederated States of Micronesia
oar.countryNauru
oar.countryPalau
oar.countryPapua New Guinea
oar.countrySamoa
oar.countrySolomon Islands
oar.countryTimor-Leste
oar.countryTonga
oar.countryTuvalu
oar.countryVanuatu
oar.countryAfghanistan
oar.countryArmenia
oar.countryAzerbaijan
oar.countryGeorgia
oar.countryKazakhstan
oar.countryKyrgyz Republic
oar.countryPakistan
oar.countryTajikistan
oar.countryTurkmenistan
oar.countryUzbekistan
oar.countryPeople's Republic of China
oar.countryHong Kong
oar.countryChina
oar.countryRepublic of Korea
oar.countryMongolia
oar.countryTaipei,China
oar.identifierOAR-004270
oar.authorShin, Kwanho
oar.importtrue
oar.googlescholar.linkpresenttrue


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  • ADBI Working Papers
    The Asian Development Bank Institute (ADBI) Working Paper series is a continuation of the formerly named Discussion Paper series which began in January 2003. The numbering of the papers continued without interruption or change. ADBI was established in 1997 in Tokyo, Japan, to help build capacity, skills, and knowledge related to poverty reduction and other areas that support long-term growth and competitiveness in developing economies in Asia and the Pacific.

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