Mauleon, Ignaciosanchez larrion, Raul2024-01-252024-01-252003Mauleón, Ignacio and Larrion, Raul, (2003), Growth and the current account: Malaysia and Singapore, International Advances in Economic Research, 9, issue 2, p. 140-151, https://EconPapers.repec.org/RePEc:kap:iaecre:v:9:y:2003:i:2:p:140-151:10.1007/bf022957151083-0898https://hdl.handle.net/10115/28864A foreign trade model is estimated for two South East Asian countries, selected because they represent two extremes as far as the current account balance is concerned-- Malaysia, deficit, Singapore, surplus. The specification highlights, (a) the simultaneous interdependence of exports and import flows--a result of what Krugman [1995] denotes as the slicing up of the production process--and, (b) the impact of investment on imports as a result of productivity shocks on the current account. The estimation results point to the instability of the market for foreign exchange. Using an intertemporal framework, a methodology to derive the external long run equilibrium is applied to the estimated model. The implied constraint on domestic growth turns out to be mild.engAttribution-NonCommercial-NoDerivatives 4.0 Internacionalhttp://creativecommons.org/licenses/by-nc-nd/4.0/simultaneous interdependencetrade flowsexternal constraininvestmentinfo:eu-repo/semantics/article10.1007/BF02295715info:eu-repo/semantics/openAccess