We use cookies on this website to give you a better user experience. By continuing to browse the site, you are agreeing to our use of cookies. Learn more

Prediction Errors of Macroeconomic Indicators and Economic Shocks for ASEAN Member States, 1990-2021

Prediction Errors of Macroeconomic Indicators and Economic Shocks for ASEAN Member States, 1990-2021
Date:
30 May 2022
Tags:
Finance and Macroeconomy

Print Article:

In this study, economic shocks on six selected Association of Southeast Asian Nations (ASEAN) Member States (i.e. Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam) are analysed in three dimensions: global, domestic, and uncertainty. Annual actual and prediction values from 1990–2021 macroeconomic indicators – from international organisations such as the Asian Development Bank – were collected, and macroeconomic shocks were calculated based on prediction errors (i.e. actual values minus prediction values). The first finding is that if prediction errors of the real gross domestic product (GDP) growth rates are negative, on average, the countries were significantly subjected to negative economic shocks that were not anticipated. Second, according to a correlation analysis of the actual values and prediction errors of real GDP growth rates, economic fluctuations and shocks are highly synchronised within the countries as well as with the world, as previous literature has indicated. Finally, by conducting regression analyses regarding the prediction error of real GDP growth rates separately for each country, (i) variations of the global real GDP growth rate are positively associated with countries’ economic shocks; (ii) the previous estimates have different quantitative significance amongst the countries; (iii) residual variations approximate country-specific, domestic shocks; and (iv) global and country-level uncertainty indices are correlated with negative economic shocks in some countries. Based on this dataset, the effect of the COVID-19 pandemic is also reviewed, and economic and historical backgrounds are examined that caused past economic shocks to these ASEAN Member States.

Prediction Errors of Macroeconomic Indicators and Economic Shocks for ASEAN Member States, 1990‒2021

Search ERIA.org

Latest Multimedia

Indonesia's ASEAN Chairmanship 2023 High-Level Policy Dialogue: ASEAN Digital Community 2045

ERIA Knowledge Lab Discusses Scaling Up Innovation and Digital Technology Ecosystem

Is ASEAN Ready for Electric Vehicles? | ASEAN Insights Podcast

Related Articles

COVID-19, ASEAN, India, Human Capital
6 July 2021
Editor(s)/Author(s): Keita Oikawa, Yasuyuki Todo, Masahito Ambashi, Fukunari Kimura, Shujiro Urata
The coronavirus disease (COVID-19) pandemic has created unprecedented difficulties for the economies of the Association of Southeast Asian Nations[...]
COVID-19, fiscal, Supply Chain
24 June 2020
Editor(s)/Author(s): Fauziah Zen, Fukunari Kimura, Fauziah Zen, Fukunari Kimura
Key MessagesPlummeting demand for goods and services, caused by the sudden[...]