Weathering the Asian Crisis: The Role of China
AbstractDuring the Asian crisis, China’s healthy reserves and low debt made possible the avoidance of a ‘country run’. Nonetheless, it did experience a substantial increase in private savings, an associated increase in capital outflow and a slowdown in economic growth. This paper employs a global general equilibrium analysis to examine the relative contributions of external and internal shocks to the Chinese economy during the crisis. The change in private savings, driven by ongoing domestic reforms, appears to have been the dominant force. By coincidence of timing, this shock was also a significant contributor to the international effects of the crisis. Nonetheless, the maintenance since before the crisis of near fixed parity with the US dollar made the combined internal and external shocks more contractionary in China than would have been the case had it been possible to retain a flexible exchange rate regime.
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Bibliographic InfoPaper provided by Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University in its series Asia Pacific Economic Papers with number 308.
Length: 37 pages
Date of creation: Oct 2000
Date of revision:
Find related papers by JEL classification:
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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- Rod Tyers & Iain Bain & Yongxiang Bu, 2008.
"China'S Equilibrium Real Exchange Rate: A Counterfactual Analysis,"
Pacific Economic Review,
Wiley Blackwell, vol. 13(1), pages 17-39, 02.
- Rod Tyers & Yongxiang Bu & Ian Bain, 2006. "China’s Equilibrium Real Exchange Rate: A Counterfactual Analysis," ANU Working Papers in Economics and Econometrics 2006-466, Australian National University, College of Business and Economics, School of Economics.
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