Steerer of global economic growth: did China step in role during the 2007-08 Great Recession? Evidence from some East Asian economies

Abstract

ABSTRACT In this paper, we investigate the impact of China’s fiscal stimulus on its major East Asian trading partners in the wake of the 2007–2008 world financial and economic crises, by estimating structural vector autoregressive (SVAR) models with monthly data, spanning the 2000–2013 period, for four countries within the Asian Production Chain: Singapore, Malaysia, Korea, and the Philippines. In fact, China’s fiscal stimulus has had positive effects on output in all those countries coupled with an inflationary pressure, mostly fueled by the increasing domestic demand in China. The effects vary between countries and time horizons.