Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109613
Authors: 
Menon, Jayant
Ng, Thiam Hee
Year of Publication: 
2013
Series/Report no.: 
ADB Working Paper Series on Regional Economic Integration 116
Abstract: 
Five years after the Global Financial Crisis, the economies of the United States (US) and the eurozone continue to struggle. How will Southeast Asian economies be affected should there be a further deterioration in conditions in the eurozone? In this paper, we present estimates using a Global Vector Autoregression model of the direct impacts in Southeast Asia of a further shock to the eurozone. We find that although the direct impacts are likely to be muted, it could trigger a much larger adjustment should it lead to a reassessment of risks and asset valuations. This is a real possibility given that vulnerability in the region has increased following massive inflows of capital and the build-up of debt related to successive bouts of quantitative easing, initially in the US and now in Japan. In light of a possible reassessment of risks and asset valuations, and with the International Monetary Fund’s resources already stretched, there is a pressing need to improve regional financial safety nets, which are currently unworkable, to deal with the fallout.
Subjects: 
eurozone crisis
asset bubbles
contagion
regional financial safety nets
Chiang Mai Initiative
ASEAN
ASEAN+3
JEL: 
E37
E58
F32
F34
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/igo
Document Type: 
Working Paper

Files in This Item:
File
Size
1.27 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.