The Output Decline in Asian Crisis Countries: Investment Aspects
February 1, 2002
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Summary
This paper examines whether capital outflows may have contributed to output declines during the Asian Crisis by reducing the financing available for domestic investment. Panel data regressions suggest a positive, short-term relationship between net capital inflows and investment during the period before 1997 in five Asian countries once real net capital flows are netted out from real flows of private bank credit. In addition, net real private inflows and real private investment appear to have been cointegrated in at least three of these countries, suggesting a long-term relationship as well.
Subject: Balance of payments, Bank credit, Capital flows, Capital inflows, Money, National accounts, Private capital flows, Private investment
Keywords: asian crisis, balance sheet, Bank credit, capital, Capital flows, Capital inflows, current account, East Asia, firm, flow data, GDP deflator, investment, investment project, net capital outflow, output, output decline, Private capital flows, private investment, Private investment, WP
Pages:
24
Volume:
2002
DOI:
Issue:
025
Series:
Working Paper No. 2002/025
Stock No:
WPIEA0252002
ISBN:
9781451844276
ISSN:
1018-5941
