Tài liệu International Capital Flows and Boom-Bust Cycles in the Asia Pacific Region +

International Capital Flows and Boom-Bust Cycles in the Asia Pacific Region +


*
Soyoung Kim
University of Illinois at Urbana-Champaign and Korea University


**
Sunghyun H. Kim
Tufts University


***
Yunjong Wang
SK Research Institute


Abstract


This paper documents evidence of business cycle synchronization in selected Asia Pacific
countries in the 1990s. We explain business cycle synchronization by the channel of international
capital flows. Using the VAR method, we find that most Asian countries experience boom-bust
cycles following capital inflows, where the boom in output is mostly driven by consumption and
investment. Empirical evidence shows that capital flows in the region are highly correlated,
which supports the conclusion that capital market liberalization has contributed to business cycle
synchronization in Asia. We also find that business cycles in the Asian crisis countries are highly
synchronized with those in Japan.


JEL Classification: F02, F36, F41


Key words: business cycle synchronization, capital flows, boom-bust cycles, financial integration.


+ We are grateful to Gordon de Brouwer, Barry Eichengreen, Takeo Hoshi, Takatoshi Ito, Eiji Ogawa, and


Yung Chul Park for their helpful comments and suggestions. This research was kindly supported by a Ford
Foundation grant.
*
Department of Economics, University of Illinois at Urbana-Champaign, DKH, 225b, 1407 W. Gregory
Drive, Urbana, IL 61801.
**
Corresponding Author. Department of Economics, Tufts University, Medford MA 02155. Tel: 617-627-
3662, Fax: 617-627-3917, E-mail: <a class="__cf_email__" href="http://www.cloudflare.com/email-protection" data-cfemail="7122041f161908041f5f3a181c3105041705025f1415045f">[email protected]<script type="text/javascript">
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*** th
SK Research Institute, 14 Floor, Seoul Finance Center, 84 Taepyungro 1-ga, Seoul 100-101, Korea.


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