Predicting global crisis recovery period: lesson from 1997 crisis

The objective of this paper is to identify the best indicator in forecasting the recovery period from the current global crisis for Malaysia. Initially, to determine the best indicator for the recovery period, we construct a simple forecasting model that incorporates three indicators: lagging, leadi...

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Main Authors:	Duasa, Jarita, Ahmad, Nursilah
Format:	Article
Language:	English
Published:	Taylor & Francis Group 2010
Subjects:	HB131 Methodology.Mathematical economics. Quantitative methods HB3711 Business cycles. Economic fluctuations
Online Access:	http://irep.iium.edu.my/4003/ http://irep.iium.edu.my/4003/ http://irep.iium.edu.my/4003/ http://irep.iium.edu.my/4003/1/paper%28GER%29.pdf

id	iium-4003
recordtype	eprints
spelling	iium-40032011-10-19T04:23:50Z http://irep.iium.edu.my/4003/ Predicting global crisis recovery period: lesson from 1997 crisis Duasa, Jarita Ahmad, Nursilah HB131 Methodology.Mathematical economics. Quantitative methods HB3711 Business cycles. Economic fluctuations The objective of this paper is to identify the best indicator in forecasting the recovery period from the current global crisis for Malaysia. Initially, to determine the best indicator for the recovery period, we construct a simple forecasting model that incorporates three indicators: lagging, leading and coincidence indices, with two proxies of economic performance, macroeconomic and financial variables. We estimate a two-variable VECM model using monthly and quarterly data covering the period 1980 to 2000. We alternate between the three indicators and we evaluate each model using out-of-sample forecast. Using the results of the initial process of analysis, we predict the recovery period of Malaysian economy from the current global economic crisis. It is found that lagging index is the best indicator of financial performance of the economy. From the half-life calculation base on error correction term, the study found that Malaysia was able to recover from the previous 1997 crisis within two to four years period after the crisis. Given that the current crisis environment is similar to the previous 1997 crisis, similar time period could applied to the current global crisis recovery. Taylor & Francis Group 2010 Article PeerReviewed application/pdf en http://irep.iium.edu.my/4003/1/paper%28GER%29.pdf Duasa, Jarita and Ahmad, Nursilah (2010) Predicting global crisis recovery period: lesson from 1997 crisis. Global Economic Review, 39 (1). pp. 99-113. ISSN 1744-3873 (O), 1226-508x (P) http://www.taylorandfrancisgroup.com/ 4003
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HB131 Methodology.Mathematical economics. Quantitative methods HB3711 Business cycles. Economic fluctuations
spellingShingle	HB131 Methodology.Mathematical economics. Quantitative methods HB3711 Business cycles. Economic fluctuations Duasa, Jarita Ahmad, Nursilah Predicting global crisis recovery period: lesson from 1997 crisis
description	The objective of this paper is to identify the best indicator in forecasting the recovery period from the current global crisis for Malaysia. Initially, to determine the best indicator for the recovery period, we construct a simple forecasting model that incorporates three indicators: lagging, leading and coincidence indices, with two proxies of economic performance, macroeconomic and financial variables. We estimate a two-variable VECM model using monthly and quarterly data covering the period 1980 to 2000. We alternate between the three indicators and we evaluate each model using out-of-sample forecast. Using the results of the initial process of analysis, we predict the recovery period of Malaysian economy from the current global economic crisis. It is found that lagging index is the best indicator of financial performance of the economy. From the half-life calculation base on error correction term, the study found that Malaysia was able to recover from the previous 1997 crisis within two to four years period after the crisis. Given that the current crisis environment is similar to the previous 1997 crisis, similar time period could applied to the current global crisis recovery.
format	Article
author	Duasa, Jarita Ahmad, Nursilah
author_facet	Duasa, Jarita Ahmad, Nursilah
author_sort	Duasa, Jarita
title	Predicting global crisis recovery period: lesson from 1997 crisis
title_short	Predicting global crisis recovery period: lesson from 1997 crisis
title_full	Predicting global crisis recovery period: lesson from 1997 crisis
title_fullStr	Predicting global crisis recovery period: lesson from 1997 crisis
title_full_unstemmed	Predicting global crisis recovery period: lesson from 1997 crisis
title_sort	predicting global crisis recovery period: lesson from 1997 crisis
publisher	Taylor & Francis Group
publishDate	2010
url	http://irep.iium.edu.my/4003/ http://irep.iium.edu.my/4003/ http://irep.iium.edu.my/4003/ http://irep.iium.edu.my/4003/1/paper%28GER%29.pdf
first_indexed	2023-09-18T20:12:02Z
last_indexed	2023-09-18T20:12:02Z
_version_	1777407542099443712

Predicting global crisis recovery period: lesson from 1997 crisis

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