The Leading eBooks Store Online 4,363,412 members ⚫ 1,467,645 ebooks

New to eBooks.com?

Learn more

High Growth and Low Consumption in East Asia: How to Improve Welfare While Avoiding Financial Failures

High Growth and Low Consumption in East Asia: How to Improve Welfare While Avoiding Financial Failures by Céline Rochon
Buy this eBook
US$ 9.00
(If any tax is payable it will be calculated and shown at checkout.)
This paper analyzes certain policies that are typical of a number of rapidly growing East Asian countries in which a fixed exchange rate, combined with a surplus labor market, has made domestic assets relatively inexpensive, generating high rates of FDI as well as domestic capital formation. This "investment hunger" can lead to unanticipated declines in the returns to investment, and resulting financial insolvencies. Private consumption remains low and there are concerns that high savings rates cannot be sustained. We construct a dynamic general equilibrium model and apply it to a stylized Asian economy, loosely based upon China. We calibrate a benchmark equilibrium, and carry out various counterfactual simulations to analyze alternative policies, in particular tax cuts and exchange rate revaluations, as instruments in increasing private consumption while avoiding bank failures.
International Monetary Fund; December 2007
33 pages; ISBN 9781452788449
Read online, or download in secure EPUB or secure PDF format
Title: High Growth and Low Consumption in East Asia: How to Improve Welfare While Avoiding Financial Failures
Author: Céline Rochon; Andrew Feltenstein; Maral Shamloo