Chapter 7: Promulgation of the US Housing Market Crisis into Asia: Impacts and Depths
Masanori Amano and Hikari Ishido INTRODUCTION 1 The US housing market crisis (subprime loan crisis) has left the Asian countries with lingering effects in production and other real as well as financial activities. Only recently have the news articles reported the upward trend in production and real GDP of those countries around the first quarter of 2009. In this chapter, we report and analyze the timing relations and depths of the US-started stagnation, with a focus on selected Asian countries. The next section gives an overview of the impacts of the US housing market crisis on Asia. Section 3 describes the falls in production growth, between January 2008 and the middle of 2009, to see how the US housing crisis has hit the Asian countries in question, although these falls are not solely due to the US crisis. Section 4 estimates some determinants of production growth of selected Asian countries, where the determinants are US variables as well as some of their own. The countries considered are Japan, Singapore, Thailand, South Korea, Malaysia, China, Indonesia, and India (throughout this chapter ‘Korea’ indicates ‘South Korea’).1 This ordering reflects the size of falls in the growth of industrial production, which were partly due to the US crisis, with Japan posting the largest drop. In the same section, we then present pairwise correlations between stock prices of the US and Asian countries. The last part of this section suggests, using regression analyses and stock price correlations, the transmission mechanism of the US-started...
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