The Big Split: Why Did Output Trajectories in the ASEAN-4 Diverge after the Global Financial Crisis?

By Agnes Isnawangsih, Vladimir Klyuev, Longmei Zhang

October 30, 2013

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Format: Chicago

Agnes Isnawangsih, Vladimir Klyuev, and Longmei Zhang. The Big Split: Why Did Output Trajectories in the ASEAN-4 Diverge after the Global Financial Crisis?, (USA: International Monetary Fund, 2013) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The global financial crisis originated in advanced economies, but had a major impact on emerging markets. The impact, however, was not uniform. Even in a relatively homogenous group of countries such as ASEAN-4 (Indonesia, Malaysia, the Philippines and Thailand), there were considerable differences both in terms of instantaneous impact of the crisis and in terms of output performance relative to trend. There are several main reasons for the divergence. First, trade shocks had a larger impact on more open economies (Malaysia and Thailand). Second, countercyclical fiscal stimulus in Indonesia and the Philippines was larger and was sustained longer. Third, idiosyncratic factors pushed output up in Indonesia and down in Thailand. Such factors include investment-friendly structural reforms and fortuitously timed election spending in Indonesia, as well as political instability and natural disasters in Thailand.

Subject: Balance of payments, Capital outflows, Depreciation, Exports, Financial crises, Fiscal policy, Fiscal stimulus, Global financial crisis of 2008-2009, International trade, National accounts

Keywords: ASEAN, Asia and Pacific, Capital outflows, Countercyclical Policies, Demand shock, Depreciation, Exports, Fiscal stimulus, Global, Global Financial Crisis, Global financial crisis of 2008-2009, IMF staff calculation, Indonesia, Indonesia ma, Malaysia, Output gap, Philippines, Potential GDP, Thailand, WP

Publication Details

Pages:

17
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/222
Stock No:

WPIEA2013222
ISBN:

9781475588774
ISSN:

1018-5941

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