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Global and regional shock transmission: an Asian perspective

Author

Listed:
  • Nagendra Shrestha

    (Yokohama National University)

  • Kiyotaka Sato

    (Yokohama National University)

Abstract

This paper constructs and uses the global input–output (GIO) table with 35 industries, 29 endogenous countries and 59 exogenous countries, and develops new indices to measure the degree of shock transmission in terms of intermediate goods and value-added embodied in production induced by negative global demand shock to finished goods. After the Global Financial Crisis (GFC) in 2008, China did not experience a large decline in economic growth, even though China’s gross exports fell most severely among Asian countries. In contrast, a sharp decrease in Japanese GDP in 2009 is a consequence of a substantial decline in finished goods exports, especially in the transport equipment industry. In Japan, the shock effect tends to be absorbed in its domestic sector and is not transmitted to other foreign countries. An asymmetric pattern of shock transmission between Japan and other Asian countries can explain why Japan was more affected by GFC than other Asian countries.

Suggested Citation

  • Nagendra Shrestha & Kiyotaka Sato, 2021. "Global and regional shock transmission: an Asian perspective," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 10(1), pages 1-25, December.
    • Handle: RePEc:spr:jecstr:v:10:y:2021:i:1:d:10.1186_s40008-021-00257-1
    DOI: 10.1186/s40008-021-00257-1
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    References listed on IDEAS

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    More about this item

    Keywords

    Global input–output table; Shock transmission; Asia; Production-chain; Intermediate goods trade; Value-added trade;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

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