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The Impact of the Global Economic Crisis on Cambodia

Author

Listed:
  • Pisey Khin

    (The Economic Institute of Cambodia)

  • Ryuta Ray Kato

    (International University of Japan)

Abstract

We numerically examine the impact of the global economic crisis on the Cambodian garment exports as well as its economy by using the conventional CGE model. A seminal aspect of the paper is that we have successfully estimated the curvature of the CET and CES production functions for the Cambodian economy, by using the time series regression method. One of our most striking results indicates that the welfare cost of the impact of the crisis at least reaches 281 million US dollars, thus resulting in a 0.3 percent decrease in GDP with 20.8 thousand direct job losses in the garment industry. Our simulation results also show that the currently ongoing policy in Cambodia only reduces the negative impact of the crisis by 32 million US dollars, and we propose an expansion of the government budget of 304 million US dollars, in order to neutralize the negative impact of the global economic crisis on the Cambodian economy.

Suggested Citation

  • Pisey Khin & Ryuta Ray Kato, 2010. "The Impact of the Global Economic Crisis on Cambodia," Economics Bulletin, AccessEcon, vol. 30(3), pages 2346-2370.
    • Handle: RePEc:ebl:ecbull:eb-10-00505
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    References listed on IDEAS

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    1. Wang, Baotai & Klein, Erwin & Rao, U. L. Gouranga, 1995. "Inflation and stabilization in Argentina," Economic Modelling, Elsevier, vol. 12(4), pages 391-413, October.
    2. Yamagata, Tatsufumi, 2006. "The Garment Industry in Cambodia: Its Role in Poverty Reduction through Export-Oriented Development," IDE Discussion Papers 62, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    3. repec:ilo:ilowps:432726 is not listed on IDEAS
    4. Sak Sambath & Ryuta Ray Kato, 2009. "Future Prospects of the Garment Industry of Cambodia," Working Papers EMS_2009_12, Research Institute, International University of Japan.
    5. N/A, 1985. "General Policy," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 74-79, January.
    6. N/A, 1985. "General Policy," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 112-117, January.
    7. Kang Chandararot. & Sok Sina. & Liv Dannet., 2009. "Rapid assessment on the impact of the financial crisis in Cambodia," ILO Working Papers 994327263402676, International Labour Organization.
    8. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550.
    9. Ballard, Charles L. & Fullerton, Don & Shoven, John B. & Whalley, John, 2009. "A General Equilibrium Model for Tax Policy Evaluation," National Bureau of Economic Research Books, University of Chicago Press, number 9780226036335, December.
    10. Eric Miller, 2008. "An Assessment of CES and Cobb-Douglas Production Functions: Working Paper 2008-05," Working Papers 19992, Congressional Budget Office.
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    Cited by:

    1. Debapriya Bhattacharya & Shouro Dasgupta & Dwitiya Jawher Neethi, 2012. "Assessing the Impact of the Global Economic and Financial Crisis on Bangladesh: An Intervention Analysis," CPD Working Paper 97, Centre for Policy Dialogue (CPD).

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    More about this item

    Keywords

    Cambodia; Computable General Equilibrium (CGE) model; Global Economic Crisis; Simulation;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • C0 - Mathematical and Quantitative Methods - - General

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