Financial Development, Economic Growth and Financial Crisis in Asian Emerging Economies: Data

Use of Quarterly Data and Disaggregation of GDP Series
One important departure of this study is the use of quarterly frequency data (Note 2). Two rationales are given as follows. First, in performing time series analysis, more observations can help obtain statistically acceptable estimates. Especially, as far as developing countries like our sample are concerned, their annual data series cover only a limited span and thus provide fewer observations. Second, as discussed below in Financial Crisis Indicator, the quarterly volatility in each elementary variable is calculated to produce the financial crisis indicator (FC). We argue that quarterly frequency is the best time size to measure volatility and take it into estimation. If monthly volatility is used, it is constantly fluctuating. Besides if annual volatility is computed, it is less fluctuating or actually is a pulse dummy highlighting a crisis year only. Retailing in rural

In line with the use of quarterly frequency data, the five countries’ annual nominal- and real per capita GDP (nominal GDP deflated by the GDP deflator and the population) series are disaggregated to quarterly ones through the method developed by Chow and Lin as the quarterly GDP series fully covering the planned period 1982Q1 to 2007Q4 were not available through all the countries. Nominal GDP series are used as a deflator in calculating several elementary variables of financial development and financial repression, and the volatility in nominal GDP is measured as one of the elementary variables of financial crisis (see Appendixes 1, 2 and 4). Likewise, we compute quarterly real per capita GDP and take its logarithm as the economic growth indicator (EG). The five countries’ nominal GDP and EG series are plotted in Appendixes 5 to 9. As illustrated, India’s EG shows prominent fluctuations around the crisis year 1991, whereas those of four countries show a clear change around the period 1997 to 1998.
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Financial Development, Economic Growth and Financial Crisis in Asian Emerging Economies: Introduction

Financial Development, Economic Growth and Financial Crisis in Asian Emerging Economies: IntroductionSince the seminal works of McKinnon and Shaw were published, the finance-growth nexus — how financial development and economic growth interact with each other — has been extensively assessed but the empirical results on this issue have not been reconciled yet. On the other hand, as more economies — in particular those known as emerging economies — have been increasingly exposed to severe financial disturbances over the last few decades, financial crisis has emerged as one of the hottest topics in the literature, highlighting crucial damages on crisis-hit economies. This article attempts to integrate these two subjects or to examine the “finance-growth-crisis” nexus in India, Indonesia, South Korea (hereafter Korea), Malaysia and Thailand. All the countries are known as emerging economies with rapid financial deepening, high economic growth and financial crisis episodes. Since the Chakravarty Committee Report (Report of the Committee to Review the Working of the Monetary System) was announced in April 1985, India was in the process of (partial) financial liberalization experiencing credit boom and high GDP growth over the late 1980s. Then the severe crisis hit that country in early 1991. As described by the term “East Asian miracle”, the high economic achievements of Indonesia, Korea, Malaysia and Thailand had been praised. Their success stories, however, suddenly ended as the Asian crisis came over the period 1997 to 1998. These stories prompt us to examine the “finance-growth-crisis nexus” in these countries. In addition, since the structural break literature was put forward by Perron, the presence of structural break(s) in the growth process (GDP series) is rationally assumed. And inspired by the fact that financial systems in these economies have been controlled to various extents, we are concerned with financial repression. In searching for more plausible estimates, these two elements should be taken into estimation. Payday Loans Online

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