Global impact of loss of confidence in Asian emerging markets

Roshen Fernando

    Research output: Contribution to journalArticle

    Abstract

    With the interest rate hike in the US and, more recently, in the UK, sudden stops in investments and capital reversals are apparent in the Asian emerging economies. A modelling approach is taken, using the G‐Cubed model, to simulate the potential global economic impacts, with a focus on Asia. The results demonstrate that myopic fiscal interventions in Asian emerging economies could result in short‐term stimulus, at the expense of long‐term growth. The stimulus in advanced economies too would be short‐lived, diverting the benefits to unintended fractions in the global economy. Advanced economies that minimally change their trade and investment patterns tend to avoid distortionary impacts of the crisis.
    Original languageEnglish
    Pages (from-to)1907-1927
    JournalThe World Economy
    Volume43
    Issue number7
    DOIs
    Publication statusPublished - 2020

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