The Decline Of Investment In East Asia Since The Asian Financial Crisis: An Overview And Empirical Examination

Date Added: Dec 2009
Format: PDF

A key legacy of the Asian financial crisis of 1997-1998 is a sustained drop-off in the investment rates of East Asian countries that were hardest hit by the crisis. The authors first review the stylized facts of investment in those countries, and then explore and evaluate the various possible explanations for the decline in investment. In the authors' empirical analysis, which expands upon Park and Shin (2009) by updating the data to include 2005-2008, they investigate the extent to which the investment rates of Asian countries can be explained by the underlying fundamental determinants of investment such as Gross Domestic Product (GDP) growth and demographic variables.