282 THE IMPACT OF GLOBAL FINANCIAL CRISIS ON LAO ECONOMY
world price and trade in developing countries. The result shows that the impacts of the global financial crisis on developing countries through the channel of changes in international trade differ widely in magnitude across country groups. Terms-of-trade was the main factor for aggregate welfare losses. Jongwanich et al. (2009) analyzed the impacts of economic slowdown in high income Organisation for Economic Co-operation and Development (OECD) countries on developing Asia in 2009-2010 using GTAP model. The result shows that the GFC might decrease real income in the region by 6-10 percent over the next two years largely as a result of a fall in exports.
While many studies have used the CGE model for developing countries, there are very few studies using CGE model building for the Lao economy3. To the best of the author’s knowledge this study is using CGE model to assess the impact of GFC on Lao economy. However, there are some existing literatures of the impact of GFC on Lao economy. For instance, World Bank (2009) predicted the impact of GFC on growth, government budget revenues, and international trade. Phaydanglobriayao (2010) overviewed the definition of economic stimulus package. Leeber (2011) and Bingham (2009) overviewed the impact of GFC and recommend economic policy to deal with crisis. Soukasavath (2010) monitored the impact of GFC which used household survey data for her analysis. Davading (2008) assessed the impact of GFC on Lao economy by descriptive analysis.