Publication: Trade and the East Asian Crisis
Date
1998-04
ISSN
Published
1998-04
Author(s)
Abstract
This economic policy note addresses the
issue of the East Asian financial crisis, suggesting that
recent trade socks, were both a cause and a consequence of
this crisis. It further suggests that, though it appears
that these trade shocks were largely cyclical in nature,
structural changes and policy choices may also have played a
role. Dramatic trade changes in the region took place, where
the region's overall imports dropped by 4 percent, with
a significant 18 percent drop in imports from Japan. Export
growth is considered to be a major prospect for short-term
economic expansion in the region, depending in part on the
composition and pattern of trade flows. The note also
suggests that policy implications should be considered, such
as heavy investments in education and skills upgrading.
Furthermore, macroeconomic policies will be required to
capitalize on the initial boost to competitiveness, provided
by recent devaluations in the region. The inevitable risk of
adjustment pressures in OECD markets exists, though raising
barriers should be avoided, since this would harm East
Asia's recovery.
Citation
“Hoekman, Bernard; Martin, Will. 1998. Trade and the East Asian Crisis. PREM Notes; No. 3. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/60f5576d-5536-5b1e-ae85-b3c9e3083df1 License: CC BY 3.0 IGO.”