Publication Type

Book Chapter

Version

publishedVersion

Publication Date

1-2015

Abstract

This paper considers the choices facing the Asian tiger economies regarding growth strategies that foster trans-Pacific rebalancing. A review of historical data spanning 2000 to 2008 reveals only a slight widening of the overall current account surplus but that there is considerable variation across the countries, with Hong Kong, China exhibiting the biggest increase in the saving and investment (S-I) balance. Meanwhile, cross-correlation coefficient estimates tentatively suggest that changes in the real effective exchange rate do not seem to exhibit a consistent negative lead over changes in the S-I gap in the short run over the past decade. Highimport leakage, particularly for the ultra small, open economies of Hong Kong and Singapore, calls into question the scope for recalibrating growth drivers towards domestic demand. Nonetheless, the implementation of structural policies such as those aimed at raising the productivity and wages of workers in the services industry as well as the introduction of financial products that alleviates the need for precautionary saving can induce domestic consumer demand, especially for the larger economies of Korea and Taipei,China. Moreover, the rising affluence and living standards in fast growing regional economies such as the People’s Republic of China (PRC) offers the Asian tigers the potential of gearing their trade structure in final goods towards markets in the region, thereby aiding the reduction in trans-Pacific imbalances.

Discipline

Asian Studies | Growth and Development | International Economics

Research Areas

Macroeconomics

Publication

Transpacific Rebalancing: Implications for Trade and Economic Growth

Editor

Barry P. Bosworth and Masahiro Kawai

First Page

183

Last Page

210

ISBN

9780815722601

Publisher

Asian Development Bank Institute

City or Country

Tokyo

Additional URL

https://worldcat.org/isbn/9780815722601

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