Challenges and choices in post-crisis East-Asia: simulations of investment policy reform in an intertemporal, global model
AbstractThe East Asian financial crisis exposed the problems of excessive government intervention in credit allocation and poor supervision of the banking system. We argue that the crisis is an opportunity to reformulate the strategies of growth by way of eliminating politicized intervention on investment. In an intertemporal general equilibrium model, we examine the adjustment processes of the crisis-hit region and the world economies, and investigate the removal of the investment subsidies. Our results suggest that the immediate impact of the crisis on the Asian economies is a contraction of GDP and investment. We also find significant welfare gains in the crisis-hit economies in response to elimination of the subsidies to firm's investment.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Richmond in its series Working Paper with number 98-07.
Date of creation: 1998
Date of revision:
Other versions of this item:
- Erinç Yeldan & Wenli Li & Xinshen Diao, 1998. "Challenges and Choices in Post-Crisis East-Asia : Simulations of Investment Policy Reform in an Intertemporal,Global Model," Departmental Working Papers 9816, Bilkent University, Department of Economics.
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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