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Unformatted text preview: rowth in 1996,
the authorities misguidedly sharply tightened fiscal
policy. OECD estimates put the direct restrictive
impact of this change at some 2 per cent of GDP
(OECD, 1998). Finally, in 1997–8, Japan was hit by
the Asian crisis. The eight smaller East- and SouthEast-Asian economies that were directly or indirectly most affected, accounted for 35 per cent of
Japanese exports in 1997. Sales to this area fell by
as much as 27 per cent in 1998.4 In addition, these
countries were also responsible for some 25 per
cent of the international lending of Japanese banks.
The losses incurred on some of these foreign loans
are likely to have reinforced banking contraction at
home. 4 Thus, OECD estimates suggest that, in 1998, the Asian crisis may have reduced Japanese GDP growth by 1½ to 3 per cent
(Richardson et al., 2000). 3 OXFORD REVIEW OF ECONOMIC POLICY, VOL. 16, NO. 2 This list of basically exogenous shocks can go a long
way in explaining the country’s experience over the
decade. The collapse of the late 19...
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This note was uploaded on 02/03/2014 for the course ECON 204 taught by Professor Devero during the Summer '13 term at American University of Sharjah.
- Summer '13