Hong Kong, Singapore and the East Asian Crisis: How Important were Trade Spillovers? Ramkishen S. Rajan and Rahul Sen The literature on the East Asian crisis has concentrated almost exclusively on the five crisishit economies of Indonesia, Korea, Malaysia, Thailand and the Philippines (Asia-5). Relatively scant attention has been paid to Hong Kong and Singapore, both of which also suffered from...

Limited empirical work has been done to the diverging current account balances of the individual emerging Asian economies. Based on the intertemporal approach to current account, this paper empirically examines both the long-run and short-run impacts of initial stock of net foreign assets, degree of openness to international trade, real exchange rate and relative income on current account balan...

This paper seeks to explain different real wage outcomes in two groups of East Asian economies: two New Industrialising Economies (NIEs: Korea and Taiwan), and three Southeast Asian economies (ASEAN-3: Malaysia, Thailand and Indonesia), all of which grew rapidly for several decades prior to the Asian economic crisis. Drawing on international and national data sets, the paper examines dynamic in...

Every economy experiences peaks and troughs in its business cycle. It has always been the researchers’ interests to identify the underlying causes of shocks. In the business cycle literature, there exists a new strand of methodology that allows the analysis at a disaggregated level using the dynamic factor model. This model allows the decomposition of aggregate shocks into country-specific, reg...

The transitions from a predominant manufacturing sector to a dominant service sector, from a male dominated labour market to an increase of female workers, and from a stable employment structure to a flexible one are the three most prominent characteristics of labour market changes in advanced economies. This paper has three objectives: i) to empirically examine labour market transitions in dei...

The primary hypothesis in this paper is that most East Asian economies have been following growth trajectories which involve ever-intensifying competition in external product markets. The financial crisis of 1997-98, whilst clearly having roots in the operations of both global and national financial systems, is in large part a reflection of these long-run growth trajectories. This is because th...

As the chances of a successful conclusion to the Doha Round of trade liberalization under the WTO become increasingly problematic, so the pace of negotiating local free trade agreements (FTAs) is increasing. According to the WTO report, countries in the Asia-Pacific region are “consolidating their drive towards regionalism at an accelerated pace”. After the trade agreements between China an...

I examine financial linkages in East Asia before the 1997-98 crisis by testing long-run and causal relationships between Japan’s saving and eight other Asian economies’ domestic investment. The results suggest that there is a long-run (cointegrating) relationship between Japan’s saving and the domestic investments of four of the five crisis economies and Taiwan. There is also evidence that Japa...

We construct a comprehensive measure for the evolution of the US financial crisis by extracting the common components in the real estate market (S&P Case-Shiller composite-10 housing price index), the equity market (S&P 500 index), and the money market (M2 money multiplier). We then investigate the effects of this crisis on six Asian economies. Using the quarterly data from Q1 1991 to Q1 2010, ...