What enabled the Asian economies to bounce back so sharply more recently? And why did some countries – around the world and within Asia – suffer much deeper contractions than others? Some light can be shed on these questions by examining the diversity of experiences among both Asian and non-Asian economies during the downturn.
Transmission channels: trade and finance The crisis that began in the West affected Asia through various transmission channels, whose relative importance depended in some degree on the particular characteristics of each economy. However, for virtually all of the Asian economies, international trade appears to have been a critical channel.