What Happened to Asian Exports During the Crisis?
December 1, 2000
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Summary
After the large exchange rate depreciations following the 1997 East Asian crisis, export volumes from East Asian countries responded with a notable lag. Two main explanations for this lag have been proposed: that the policy of high interest rates limited access to domestic credit and hence limited the supply of exports; and that “competitive depreciation” neutralized the effects on demand for exports. This paper considers the plausibility of these two mechanisms using a new monthly database on exports of selected industries. We find evidence that “competitive depreciation” did play a fundamental role in the propagation of the East Asian crisis through the trade channel, even at a monthly frequency.
Subject: Depreciation, Domestic credit, Export earnings, Export prices, Exports, International trade, Money, National accounts, Prices
Keywords: Cointegration, Competitive Depreciation, credit crunch, demand and supply, demand and supply supply curve, Depreciation, Domestic credit, East Asia, equilibrium point, export decline, Export Demand and Supply, export demand and supply equation, Export earnings, export equation, Export prices, export quantity, export supply, export variable, export volume, Exports, growth rate, supply price, WP
Pages:
31
Volume:
2000
DOI:
Issue:
200
Series:
Working Paper No. 2000/200
Stock No:
WPIEA2002000
ISBN:
9781451860153
ISSN:
1018-5941
