The Impact of the Global Economic Crisis on Cambodia
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.
Volume (Year): 30 (2010)
Issue (Month): 3 ()
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- 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).
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- Eric Miller, 2008. "An Assessment of CES and Cobb-Douglas Production Functions: Working Paper 2008-05," Working Papers 19992, Congressional Budget Office.
- repec:cup:cbooks:9780521266550 is not listed on IDEAS
- Kang Chandararot & Sok Sina & Liv Dannet, 2009. "Rapid assessment on the impact of the financial crisis in Cambodia," ILO Working Papers 432726, International Labour Organization.
- Wang, Baotai & Klein, Erwin & Rao, U. L. Gouranga, 1995. "Inflation and stabilization in Argentina," Economic Modelling, Elsevier, vol. 12(4), pages 391-413, October.
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