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Sources of fluctuations in output: Evidence from small, open economies of Asia

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  • Radha Bhattacharya

Abstract

This paper considers a set of five Asian economies that differ in their degree of outward orientedness, and examines the role of oil price shocks, non‐oil world supply shocks, exports and domestic supply shocks in causing fluctuations in domestic output. Results from a vector autoregressive model indicate that exports and non‐oil world supply shocks are more important for the ‘outward‐oriented’ economies of Singapore, South Korea and Malaysia, when compared with the moderately ‘inward‐oriented’ economy of the Philippines and the strongly ‘inward‐oriented’ economy of India. However, exports and non‐oil world supply shocks each account for no more than a fifth of the variation in output in Singapore, South Korea and Malaysia. There is no long‐term equilibrium relationship (cointegration) between exports and output. This supports the view that exports were not the single driving force behind the economic growth of these high‐performing countries. A substantial portion of variation in domestic output is explained by domestic supply shocks. Adverse effects of oil price shocks are found in the case of the oil‐importing countries of South Korea and India.

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  • Radha Bhattacharya, 1997. "Sources of fluctuations in output: Evidence from small, open economies of Asia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 2(3), pages 378-387.
    • Handle: RePEc:taf:rjapxx:v:2:y:1997:i:3:p:378-387
    DOI: 10.1080/13547869708724627
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    1. repec:ebl:ecbull:v:15:y:2005:i:6:p:1-9 is not listed on IDEAS
    2. Yu Hsing, 2005. "Application of the IS-MP-IA model to the Singapore economy and policy implications," Economics Bulletin, AccessEcon, vol. 15(6), pages 1-9.
    3. Francisco Garcia-Blanch, 2001. "An Empirical Inquiry into the Nature of South Korean Economic Growth," CID Working Papers 74A, Center for International Development at Harvard University.

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