Global Economic Effects of the Asian Currency Devaluations (Policy Analyses in International Economics) (Policy Analyses in International Economics)

Introduction......Page 2 Origins and Nature of the Crisis......Page 4 The Fundamentalist Story......Page 6 Table 1.1 Current account deficits as a share of GDP, 1975-97......Page 7 Figure 1.1B Malaysia's real exchange rate, January 1995-January 1998......Page 8 Figure 1.1D Indonesia's real exchange rate, January 1995-January 1998......Page 9 Figure 1.1E South Korea's real exchange rate, January 1995-January 1998......Page 10 Table 1.2 Banking system exposure to risk......Page 11 The Exchange Rate as a Transmission Mechanism......Page 12 Table 1.3 China’s nominal and real effective exchange rate, 1990-97......Page 16 Capital Inflows and Financial Fragility......Page 15 Figure 1.2 Stock market capitalization, 1985-1996......Page 17 The Trigger......Page 18 Figure 1.3B Malaysia's nominal exchange rate and stock market changes......Page 20 Figure 1.3D Indonesia's nominal exchange rate and stock market changes......Page 21 Lender Behavior......Page 22 Figure 1.4 South Korea's real GDP growth and real exchange rate change forecasts......Page 24 Transmission......Page 25 Table 1.5 Export markets for Asian competitors, 1995......Page 26 Credibility......Page 27 Summary......Page 28 Structure of the World Model......Page 31 Defining Modeling Scenarios......Page 35 Table 2.1 Exchange rate forecasts......Page 36 Table 2.2 Real effective exchange rates since July 1997......Page 37 Table 2.4 Modeling assumptions......Page 38 ASEAN-4 and South Korea......Page 39 Figure 2.1 Impact of Asian cumulative devaluations on Thailand's exports and imports......Page 40 Table 2.5 Change of bilateral trade flows from the base (current price, with productivity shock, Chinese devaluation excluded......Page 42 Table 2.6 GDP, balance of trade, and absorbtion changes......Page 43 Table 2.7 Sectoral change of production from the base (Chinese devaluation excluded)......Page 44 Table 2.8 Sectoral change of trade balance from the base (Chinese devaluation excluded)......Page 45 Figure 2.3 Impact of Asian cumulative devaluations onIndonesia's exports and imports......Page 46 Figure 2.4 Impact of Asian cumulative devaluations on the Philippines' exports and imports......Page 47 Singapore, Taiwan, and Japan......Page 48 Figure 2.6 Impact of Asian cumulative devaluations on Taiwan's exports and imports......Page 49 Figure 2.7 Impact of Asian cumulative devaluations on Singapore's exports and imports......Page 50 Figure 2.8 Impact of Asian cumulative devaluations on Japan's exports and imports......Page 51 Western Europe and Oceania......Page 52 China......Page 53 Figure 2.9 Impact of Asian cumulative devaluations on China's exports and imports......Page 54 Table 2.9 Change of bilateral trade flows from the base (current price, with productivity shock, Chinese devaluation included......Page 55 Conclusion......Page 57 3 Impact on the United States......Page 60 Figure 3.1 Impact of Asian cumulative devaluations on United States exports and imports......Page 61 Table 3.1 Impact of Asian cumulative devaluations on US trade and sectoral production (medium-shock scenarios, with and witho......Page 62 Trade Policy Response......Page 63 Table 3.2 US Trade Representative scrutiny of foreign trade and investment barriers......Page 64 Table 3.3 Correlations, 1984-93......Page 65 Table 3.4 Bilateral trade conflict......Page 66 Table 3.5 Determinants of success......Page 67 Table 3.6 Impact on US trade relations......Page 68 Conclusion......Page 70 Appendix A Algebraic Description of the Model......Page 72 Production......Page 73 Demands......Page 74 International Shipping......Page 75 Price System......Page 76 Figure A.3 Price system......Page 77 Choice of Macro Closure......Page 78 Box A.1 Notation......Page 80 Table A.1 Price equations......Page 81 Trade and Final Demand Equations......Page 82 International Shipping Equations......Page 83 Table A.4 International shipping equations......Page 84 Table A.5 Income and savings equations......Page 85 Table A.6 General equilibrium conditions......Page 86 Table A.7 Definitions of variables......Page 87 Table A.8 Definitions of parameters......Page 89 Appendix B Sectoral Definitions and Their GTAP- ISIC Concordance......Page 90 Appendix B Sectoral definitions and their GTAP- ISIC concordance......Page 91 Appendix C Sensitivity Analyses......Page 93 Table C.1 Change of bilateral trade matrix from the base (current price with productivity shock, Chinese devaluation excluded......Page 94 Table C.2 Change of bilateral trade matrix from the base (current price with productivity shock, Chinese devaluation excluded......Page 95 Appendix D Elasticities......Page 96