Turning economic shocks into business advantage

We are living in a globalised world where economic and financial shocks in one economy impact on other economies through trade and financial integration.

Economies are merging closer together, and if detrimental economic events occur in one country, it will most certainly affect trading partners. In other words, a downturn in one economy will create ripple effects, impacting on other places around the world.

Dr Khan is looking at economic shocks, and how they impact society.

'I am using real-life data to see if the fundamental economics and accounting theories and principles hold in real life and whether they can be validated,' says Dr Khan.

'Instabilities that we face, such as the Asian Financial Crisis in 1997-1998, did not just affect Asia. With globalisation, a downturn in one economy affects the whole world because all economies are linked'.

'Chinese instability, for example, will substantially affect Australia through trade and financial channels,' says Dr Khan.

To avoid repeating what has happened in the past, or at least minimize the adverse impact of economic and financial shocks, we must check the fundamentals, analysing real-life data.

'These fundamental principles impact people's decision making,' he says.

Through examining how shocks originate in an economy or region and how they propagate to other economies, Dr Khan is working to minimise the adverse impacts of these shocks on society.

'If we understand the direct and indirect impacts between economies in both normal conditions and in tough times then we can implement initiatives to diversify and mitigate these impacts.'

'We look at which sectors are affected and make strategies to mitigate the adverse side effects,' says Dr Khan.

Dr Khan hopes that the results of this analysis can be used to help policy and decision makers. He believes that emerging economies need to collect and analyse their real-life data and use the information to design an effective policy that support their growth at all levels of development.

Dr Khan's research interests combine the empirical sides of Economics, Finance and Accounting.