Policy Analyses in International Economics 56
by Li-Gang Liu
and Sherman Robinson
and Zhi Wang
and Marcus Noland
The Asian financial crisis has precipitated significant changes in real exchange rates in the region that will substantially alter the volume and pattern of international trade. The crisis countries will increase their exports and, especially, reduce their imports. Japan, China, and the other non-crisis countries will experience more complex changes. The trade balances of the United States and Western Europe will deteriorate by about $40-50 billion as a result of the currency movements in Asia.
This study, newly updated in August 1999, quantifies the impact of the currency changes on the individual countries in Asia, on the United States, on Europe and on other regions on a sector-by-sector basis. It analyzes the additional impact that might occur if China, thus far a relative bystander in the crisis, were to devalue its currency as well. It then examines potential trade policy responses to these developments including the risk of an upsurge in protectionist pressure in the United States.
1. Introduction and Overview 583.5KB
2. Global Economic Effects 774.2KB
3. Impact on the United States 378.3KB
4. Appendices 586.9KB
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ISBN paper 0-88132-260-1
Commentaries on This Book
"This is a clear and well argued analysis of the crisis in Asia. Using an empirical model as a basis for dissecting the many complex interdependencies adds significantly to our understanding of the key policy issues..."
—Warwick J. McKibbin
Professor of International Economics
Australia National University;
Non-Resident Senior Fellow
The Brookings Institution