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Asia's trade performance after the currency crisis

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Abstract

The Asian countries hit by the 1997-98 currency crisis experienced a sharp reversal of capital flows that forced their current account balances to move from deficit to surplus. This study of the trade flows of Indonesia, Malaysia, South Korea, and Thailand finds that steep declines in imports, measured in dollar terms, accounted for almost all of the improvements in current account balances. However, a fuller picture emerges when the authors analyze the trade flows according to the volume of goods being shipped and the prices of these goods. The analysis shows that several factors contributed to the current account adjustment: higher export volumes in response to increased foreign demand outside of Asia, lower dollar import prices in line with declining world export prices, and the collapse in import volumes due to sharp declines in domestic economic activity.

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  • Matthew Higgins & Thomas Klitgaard, 2000. "Asia's trade performance after the currency crisis," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 37-49.
    • Handle: RePEc:fip:fednep:y:2000:i:sep:p:37-49:n:v.6no.3
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    References listed on IDEAS

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    Cited by:

    1. Ismael Arciniegas Rueda, 2012. "Empirical Analysis Of Speculative Attacks With Contractionary Real Effects," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 19(2), pages 102-127, April.
    2. Kristin J Forbes, 2002. "How Do Large Depreciations Affect Firm Performance?," IMF Staff Papers, Palgrave Macmillan, vol. 49(Special i), pages 214-238.
    3. Paasche, Bernhard, 2001. "Credit constraints and international financial crises," Journal of Monetary Economics, Elsevier, vol. 48(3), pages 623-650, December.
    4. Ismael E Arciniegas Rueda & Fabio Arciniegas, 2005. "SOM-based Data Analysis of Speculative Attacks' Real Effects," International Finance 0507001, University Library of Munich, Germany.

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