Recessions and Recoveries in Asia: What Can the Past Teach Us about the Present

Souvik Gupta and Jacques Miniane

in The Global Financial Crisis and Asia

Published in print October 2012 | ISBN: 9780199660957
Published online January 2013 | e-ISBN: 9780191748981 | DOI:
Recessions and Recoveries in Asia: What Can the Past Teach Us about the Present

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This chapter examines past recessions and recoveries in Asia in order to shed light on these issues. Key findings suggest that recoveries in Asia have typically been weak because they were driven by single engine ― exports. In Asia, deep recessions have resulted in substantial declines in potential output growth, meaning that their effects are not just cyclical but permanent. With external demand for Asia's products vanishing as a result of a sharp deleveraging in advanced economies at the height of the global financial crisis, export and industrial production growth in the region plunged in late 2008 to unimaginable levels. In turn, weakness in exports spilled over to domestic demand, with investment in particular showing signs of decline at a high rate. Major policy efforts in Asia and abroad averted the worst, and paved the road for normalization in global trade and growth.

Keywords: recession; production growth; deleveraging; Asian market; economic recovery

Chapter.  5847 words.  Illustrated.

Subjects: Financial Markets

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