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What Happened to Asian Exports During the Crisis? Rupa Duttagupta and Antonio Spilimbergo Full Text of this Article (PDF 205K) Abstract: 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
contraction in domestic credit affected supply of exports and that "competitive
depreciation" by other countries neutralized the effects on demand
for exports. This paper considers the plausibility of these two mechanisms
using a new monthly database of exports of selected industries. The results
indicate that "competitive depreciation" played an important
role in the propagation of the East Asian crisis through the trade channel,
even at a monthly frequency. |
