The influences of international output shocks from the US and China on ASEAN economies

Abstract

The contribution of international and domestic shocks to macroeconomic outcomes in Asian countries is of significant domestic policy importance. This paper applies a Structural Vector AutoRegressive (SVAR) model to Singapore, Thailand, the Philippines, Malaysia and Indonesia. We show the contribution of foreign shocks to domestic output and inflation outcomes, and assess whether Chinese shocks have a more pronounced effect than those originating from the US. The explanatory value of US shocks outweighs those from China, potentially reflecting the importance of US based end consumers.