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Pisey Khin and Ryuta Ray Kato
''The Impact of the Global Economic Crisis on Cambodia''
( 2010, Vol. 30 No.3 )
We numerically examine the impact of the global economic crisis on the Cambodian garment exports as well as its economy by using the conventional CGE model. A seminal aspect of the paper is that we have successfully estimated the curvature of the CET and CES production functions for the Cambodian economy, by using the time series regression method. One of our most striking results indicates that the welfare cost of the impact of the crisis at least reaches 281 million US dollars, thus resulting in a 0.3 percent decrease in GDP with 20.8 thousand direct job losses in the garment industry. Our simulation results also show that the currently ongoing policy in Cambodia only reduces the negative impact of the crisis by 32 million US dollars, and we propose an expansion of the government budget of 304 million US dollars, in order to neutralize the negative impact of the global economic crisis on the Cambodian economy.
Keywords: Cambodia, Computable General Equilibrium (CGE) model, Global Economic Crisis, Simulation
JEL: F4 - Macroeconomic Aspects of International Trade and Finance: General
Manuscript Received : Aug 15 2010 Manuscript Accepted : Sep 08 2010

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