Papa N'Diaye (International Monetary Fund) Ping Zhang (External Department, Hong Kong Monetary Authority) Wenlang Zhang (Research Department, Hong Kong Monetary Authority)
Abstract
This paper analyses the potential benefits from reforms aimed at promoting domestic demand in the region, as well as the effects of slower growth in the United States and the G3 on EMEAP economies.The analysis is based on simulation scenarios using an expanded version of the IMF Global Integrated Monetary and Fiscal (GIMF) model. The GIMF model is particularly useful for conducting medium-term policy analysis, because it incorporates rich layers of intra-regional trade, production, and demand that allow the transmission mechanism of structural reforms and external shocks to be fully articulated. The simulation results show that reforms to rebalance the pattern of demand in regional economies (such as Mainland China) more towards domestic demand could entail non-negligible benefits for the EMEAP. These benefits could be even larger for those economies that more flexibly adjust to the shift in China's trade pattern. The simulation results also illustrate structural reforms in EMEAP economies will allow them to reduce vulnerabilities to economic downturns in the major advanced economies.
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Publisher Info
Paper provided by Hong Kong Monetary Authority in its series Working Papers with number
0817.
Find related papers by JEL classification: E2 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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