Discussion Paper Details

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Title: What Happened to Asian Exports During the Crisis?

Author(s): Rupa Duttagupta and Antonio Spilimbergo

Publication Date: December 2003

Keyword(s): co-integration, competitive depreciation, east asia and export demand and supply

Programme Area(s): International Macroeconomics

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 on 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.

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Bibliographic Reference

Duttagupta, R and Spilimbergo, A. 2003. 'What Happened to Asian Exports During the Crisis?'. London, Centre for Economic Policy Research.