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The Impact of the US Subprime Mortgage Crisis on the World and East Asia: Through Analyses of Cross-border Capital Movements

Author

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  • Sayuri SHIRAI

    (Faculty of Policy Management, Keio University, Japan)

Abstract

The world economy is currently suffering a global financial and economic crisis that has become severe since the second half of 2008. This global financial situation was triggered by?the advent of the subprime mortgage crisis in the United States that became apparent in mid-2007.?Europe was the first area affected, thereafter its contagion spread to the rest of the world. East Asia?did not escape. The nature of the current global financial crisis is unprecedented in terms of (1) the?scale of the problems in the financial sector (particularly in the United States and Europe), (2) the?depth and speed of contagion worldwide (through financial sector and trade linkages), and (3) the?severity of the recession (particularly in emerging market economics, small countries, and East?Asia). This paper analyzes, mainly, cross-border capital movements by looking at the pre-crisis?features of the United States as the crisis hypocenter and its relationships with other countries.?Detailed observations are presented on cross-border investment in stocks and debt securities, as well?as banking activities. The paper then sheds light on the impact of the subprime mortgage crisis on?cross-border capital movements in the United States, the United Kingdom, and East Asia. Other?performance indicators such as exchange rates, economic growth and international trade are also?discussed in the case of East Asia. The paper examines several challenges posed for East Asia by?the crisis.

Suggested Citation

  • Sayuri SHIRAI, 2009. "The Impact of the US Subprime Mortgage Crisis on the World and East Asia: Through Analyses of Cross-border Capital Movements," Working Papers d013, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:d013
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    Citations

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    Cited by:

    1. Sayuri Shirai, 2009. "Cross-Border Investment and the Global Financial Crisis in the Asia-Pacific Region," MPDD Working Paper Series WP/09/04, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    2. Sayuri Shirai, 2009. "Cross-Border Investment and the Global Financial Crisis in the Asia-Pacific Region," MPDD Working Paper Series WP/09/04, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    3. Mansooreh Kazemilari & Ali Mohamadi, 2018. "Topological Network Analysis Based on Dissimilarity Measure of Multivariate Time Series Evolution in the Subprime Crisis," IJFS, MDPI, vol. 6(2), pages 1-16, May.
    4. Shirai, Sayuri, 2009. "世界経済危機とグローバル・マネーの変動 ―国際経済秩序へのインプリケーションー [Global Economic Crisis and Movements of Cross-Border Capital Flows ―Implication to the Global Economic Order―]," MPRA Paper 18619, University Library of Munich, Germany.
    5. Samet Günay, 2016. "Alteration of Risk in Asian Bond Markets during and after Mortgage Crisis: Evidence from Value at Risk (VaR) Analysis," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 12(Suppl. 1), pages 159–182-1.
    6. Strašek Sebastjan, 2017. "From Subprime and Eurozone Crisis with Full Speed into the Next Financial Crisis," Naše gospodarstvo/Our economy, Sciendo, vol. 63(3), pages 3-11, September.

    More about this item

    Keywords

    Subprime mortgage; Global financial and economic crisis; Capital flows; International financial center.;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • F2 - International Economics - - International Factor Movements and International Business
    • F3 - International Economics - - International Finance

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