1. Asia's rebalancing and growth.
- Author
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Kim, Soyoung, Lee, Jong‐Wha, and McKibbin, Warwick J.
- Subjects
INTERNATIONAL trade ,ECONOMIC development ,GROSS domestic product ,EMERGING markets ,ECONOMIC policy - Abstract
The paper investigates the impact of Asia's demand rebalancing and supply‐side productivity changes on long‐term economic growth in Asia and worldwide. Results from a panel vector autoregression model show that a productivity–neutral demand‐rebalancing shock has no permanent effect on Asian output, whereas labour productivity shocks have significant, positive and permanent effects. Simulations using a global intertemporal multisector general equilibrium model suggest that labour productivity shocks increase the foreign GDP over time, but rebalancing shocks have a negative international spillover effect. In addition, labour productivity shocks help in rebalancing. Structural reforms promoting labour productivity growth along with rebalancing policies across Asia can achieve higher economic growth worldwide. [ABSTRACT FROM AUTHOR]
- Published
- 2018
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