A neoclassical analysis of the asian crisis: Business cycle accounting for a small open economy

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14 Citations (Scopus)

Abstract

This paper applies the business cycle accounting method la Chari, Kehoe and McGrattan (2007) to a standard neoclassical small open economy model and assesses the economic crises in Hong Kong, Korea and Thailand. Quantitative results show that distortions in production efficiency are important in all countries in accounting for the sudden output collapses while distortions in the investment and international financial markets are not. If domestic or international financial frictions are the main source of the Asian crisis, they must have operated through total factor productivity (TFP).

Original languageEnglish
Article number17
JournalB.E. Journal of Macroeconomics
Volume10
Issue number1
DOIs
Publication statusPublished - 2010 Jan 1
Externally publishedYes

Keywords

  • Asian crisis
  • TFP
  • business cycle accounting
  • small open economy

ASJC Scopus subject areas

  • Economics and Econometrics

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