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Why was Asia Resilient? Lessons from the Past and for the Future

Author

Listed:
  • Phakawa Jeasakul

    (International Monetary Fund, 700 19th Street, N.W., Washington, D.C. 20431, USA)

  • Cheng Hoon Lim

    (International Monetary Fund, 700 19th Street, N.W., Washington, D.C. 20431, USA)

  • Erik Lundback

    (International Monetary Fund, 700 19th Street, N.W., Washington, D.C. 20431, USA)

Abstract

Asia proved to be remarkably resilient in the face of the global financial crisis, but why was its output performance stronger than that of other regions? The paper shows that better initial conditions — in the form of lower external and financial vulnerabilities — contributed significantly to Asia's resilience. Key pre-crisis factors included moderate credit expansion, reliance on deposit funding, enhanced bank asset quality, reduced external financing, and improved current accounts. These improvements reflected the lessons from the Asian financial crisis in the late 1990s, which helped to reshape both public policies and private sector behavior. Looking ahead, Asia is in the process of adjusting to more volatile external conditions and higher risk premiums. By drawing the right lessons from its pre-crisis experiences, Asia's economies will be better equipped to address new risks associated with increased cross-border capital flows and greater integration with the rest of the world.

Suggested Citation

  • Phakawa Jeasakul & Cheng Hoon Lim & Erik Lundback, 2014. "Why was Asia Resilient? Lessons from the Past and for the Future," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1-22.
    • Handle: RePEc:wsi:jicepx:v:05:y:2014:i:02:n:s1793993314500021
    DOI: 10.1142/S1793993314500021
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Committee, Nobel Prize, 2022. "Financial Intermediation and the Economy," Nobel Prize in Economics documents 2022-2, Nobel Prize Committee.
    2. Kowalewski, Oskar & Pisany, Paweł, 2019. "What drove the growth of the corporate bond markets in Asia?," Research in International Business and Finance, Elsevier, vol. 48(C), pages 365-380.
    3. Benchimol, Jonathan & Bozou, Caroline, 2024. "Desirable banking competition and stability," Journal of Financial Stability, Elsevier, vol. 73(C).
    4. Ștefan Constantin Radu & Beatrice Maria Poenaru, 2021. "Analyzing The Resilience Of The Central And Eastern European Stock Markets During The Covid-19 Pandemic," Management Strategies Journal, Constantin Brancoveanu University, vol. 54(4), pages 61-68.
    5. Takatoshi Ito, 2018. "Changing International Financial Architecture: Growing Chinese Influence?," Asian Economic Policy Review, Japan Center for Economic Research, vol. 13(2), pages 192-214, July.
    6. Eichengreen, Barry & Park, Donghyun & Shin, Kwanho, 2024. "Economic resilience: Why some countries recover more robustly than others from shocks," Economic Modelling, Elsevier, vol. 136(C).
    7. International Monetary Fund, 2016. "Asean-5 Cluster Report: Evolution of Monetary Policy Frameworks," IMF Staff Country Reports 2016/176, International Monetary Fund.
    8. Guglielmo Maria Caporale & Luis A. Gil-Alana & Kefei You, 2019. "Stock market linkages between the ASEAN countries, China and the US: a fractional cointegration approach," CESifo Working Paper Series 7537, CESifo.

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    More about this item

    Keywords

    Global financial crisis; resilience; financial and external vulnerabilities; G01; E44; F32; N25;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East

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