The Impact of the US Subprime Mortgage Crisis on the World and East Asia
AbstractThe world economy currently suffers from a global financial and economic crisis that has become severe since the second half of 2008. This global financial situation was triggered by the advent of the subprime mortgage crisis in the United States that became apparent from the mid-2007s. Europe was the next affected, thereafter its contagion spread to the rest of the world. East Asia did not escape. The nature of the current global financial crisis is unprecedented in terms of (1) the scale of the problems in the financial sector (particularly in the United States and Europe), (2) the depth and speed of contagion worldwide (through financial sector and trade linkages), and (3) the severity of the recession (particularly in emerging market economics, small countries, and East Asia). This paper analyzes, mainly, cross-border capital movements by looking at the pre-crisis features of the United States as the crisis hypocenter and its relationships with other countries. Detailed observations are conducted with respect to cross-border investment in stocks and debt securities, as well as banking activities. The paper then sheds light on the impact of the subprime mortgage crisis on cross-border capital movements in the United States, the United Kingdom, and East Asia. Other performance indicators such as exchange rates, economic growth and international trade are also discussed in the case of East Asia. The paper examines several challenges the recent crisis poses for East Asia.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14722.
Date of creation: 02 Apr 2009
Date of revision:
Subprime Mortgage; Global Economic Crisis; East Asia; Cross-border capital flows;
Find related papers by JEL classification:
- F3 - International Economics - - International Finance
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-04-25 (All new papers)
- NEP-FMK-2009-04-25 (Financial Markets)
- NEP-SEA-2009-04-25 (South East Asia)
- NEP-URE-2009-04-25 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Olaf Unteroberdoerster & Cynthia Leung, 2008. "Hong Kong SAR as a Financial Center for Asia: Trends and Implications," IMF Working Papers 08/57, International Monetary Fund.
- Okabe, Yasunobu, 2013. "Financial Restructuring after the 1997 Crisis and Impact of the Lehman Shock: Path Dependence of Financial Systems in Korea and Thailand," Working Papers 51, JICA Research Institute.
- Shirai, Sayuri, 2009.
[Global Economic Crisis and Movements of Cross-Border Capital Flows ―Implicatio," MPRA Paper 18619, University Library of Munich, Germany.
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