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Effects of the Asian Economic Crisis on Singapore and Its Policy Responses: A General Equilibrium Analysis

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    Abstract

    The declining regional demand for Singapore's exports due to contraction in the crisis economies, slower growth in real investment, and loss of competitiveness in the face of competitive devaluations posed new challenges for Singapore which must adopt policies to combat the crisis. This paper examines the impact of the crisis on Singapore and the effects of proposed policies using the computable general equilibrium (CGE) modelling approach. We use two CGE models: a world model and a model of Singapore. First, the impact of the crisis is simulated using the GTAP (Global Trade Analysis Project) model. Then the effects of policy responses are examined using the Singapore model. In particular, we examine wage reduction, domestic demand stimulation, and exchange rate policies.
    Original languageEnglish
    Article numberPaper No. 6
    Pages (from-to)1-21
    JournalUNEAC Asia Papers
    Volume6
    Publication statusPublished - 2003

    Keywords

    • Economic Models and Forecasting

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