The Asian Financial Crisis and Global Adjustments: Implications for US Agriculture

Warwick J. McKibbin, William Coyle, and Zhi Wang


The impact of the recent Asian financial crisis on global economic adjustment
and its implication for US agriculture using a multi-country, multi-sector
dynamic intertemporal general equilibrium model with endogeneously modeled
financial markets is investigated. The simulation results show that the crisis
in Asia reduces not only US exports but also interest rates and the cost of
intermediate inputs of production, stimulating US domestic economic activity in
interest-sensitive sectors, and driving up demand for agriculture products.
However, this stimulus of domestic demand may or may not offset the negative
impact of declining exports.

JEL Codes: D58, F17, F30

Full article available from Japanese Economic Review.