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The impact of the financial crisis on emerging Asia

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  • Goldstein, Morris
  • Xie, Daniel

Abstract

This paper analyzes how the global financial crisis has impacted emerging Asia and identifies key characteristics that have made these economies more or less vulnerable to a transmission of crises from the advanced economies. After reviewing how economic outcomes in emerging Asia have evolved since the crisis began in the summer of 2007, Morris Goldstein and Daniel Xie review several studies of the effect of financial stress and/or growth slowdown in advanced economies on emerging Asia. They then discuss how emerging Asia is "different" in ways that matter for the contagion of crises, with the emphasis on currency and maturity mismatches, the nature of the region's foreign trade links (product composition, the geographic pattern of trade, and the degree of net export-led growth), financial market integration with the advanced economies, and the scope for implementing countercyclical monetary and fiscal stimulus.
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Suggested Citation

  • Goldstein, Morris & Xie, Daniel, 2009. "The impact of the financial crisis on emerging Asia," Proceedings, Federal Reserve Bank of San Francisco, issue Oct, pages 27-80.
    • Handle: RePEc:fip:fedfpr:y:2009:p:27-80
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    References listed on IDEAS

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    1. Kristin J. Forbes & Menzie D. Chinn, 2004. "A Decomposition of Global Linkages in Financial Markets Over Time," The Review of Economics and Statistics, MIT Press, vol. 86(3), pages 705-722, August.
    2. Morris GOLDSTEIN & Daniel XIE, 2009. "US Credit Crisis and Spillovers to Asia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 4(2), pages 204-222.
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    6. Hui Tong & Shang-Jin Wei, 2011. "The Composition Matters: Capital Inflows and Liquidity Crunch During a Global Economic Crisis," Review of Financial Studies, Society for Financial Studies, vol. 24(6), pages 2023-2052.
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    11. Morris Goldstein & Philip Turner, 2004. "Controlling Currency Mismatches in Emerging Markets," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 373.
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    16. Stephan Danninger & Irina Tytell & Ravi Balakrishnan & Selim Elekdag, 2009. "The Transmission of Financial Stress from Advanced to Emerging Economies," IMF Working Papers 09/133, International Monetary Fund.
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    Citations

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    Cited by:

    1. Vogel, Ursula & Winkler, Adalbert, 2010. "Foreign banks and financial stability in emerging markets: Evidence from the global financial crisis," Frankfurt School - Working Paper Series 149, Frankfurt School of Finance and Management.
    2. Xu, Ying & La, Hai Anh, 2015. "Foreign banks and international shock transmission: Does bank ownership still matter?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 38(C), pages 200-216.
    3. Pierre Salama, 2012. "Una globalización comercial acompañada de una nueva distribución cartográfica," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 14(27), pages 57-80, July-Dece.
    4. Simone Berardi & Gabriele Tedeschi, 2016. "How banks’ strategies influence financial cycles: An approach to identifying micro behavior," Working Papers 2016/24, Economics Department, Universitat Jaume I, Castellón (Spain).
    5. Wagner, Charlotte & Winkler, Adalbert, 2013. "The Vulnerability of Microfinance to Financial Turmoil – Evidence from the Global Financial Crisis," World Development, Elsevier, vol. 51(C), pages 71-90.
    6. Amira El-Shal, 2012. "The Spillover Effects of the Global Financial Crisis on Economic Activity in Emerging Economies – Investigating the Egyptian Case Using the Financial Stress Index," Working Papers 737, Economic Research Forum, revised 2012.
    7. Amanjot Singh & Manjit Singh, 2016. "Investigating Impact of US, Europe, Frontier and BRIC Stock Markets on Indian Financial Stress Index," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(6), pages 23-44, June.
    8. Ahmed Khalid, 2012. "Cost Consequences to the Economy and Finance," Chapters,in: Regulatory Failure and the Global Financial Crisis, chapter 7 Edward Elgar Publishing.
    9. Mirajul Haq & Karim Khan & Ayesha Parveen, 2014. "The Growth and Employment Impacts of the 2008 Global Financial Crisis on Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 19(2), pages 129-154, July-Dec.
    10. Maurice Obstfeld, 2014. "Never Say Never: Commentary on a Policymaker’s Reflections," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 62(4), pages 656-693, November.

    More about this item

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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