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on Central and Western Asia |
| By: | Yasuyuki Sawada (Faculty of Economics, University of Tokyo); Satoshi Shimizutani (Institute of Economic Research, Hitotsubashi University) |
| Abstract: | We investigate whether people were insured against unexpected losses caused by the Great Hanshin-Awaji (Kobe) earthquake in 1995. The unique household data employed led to several empirical findings under a natural-experimental situation. The complete consumption insurance hypothesis is rejected overwhelmingly, suggesting the ineffectiveness of the formal and/or informal insurance mechanisms against the earthquake. We also investigate possible factors that inhibit full risk-sharing. Transfers may be particularly ineffective as insurance against losses for co-resident households. Households borrow extensively against housing damages, whereas dissavings are utilized for smaller asset damages, implying a hierarchy of risk-coping measures, from dissaving to borrowing. |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:tky:fseres:2005cf314&r=cwa |
| By: | Kirby Adam J.R. Faciane (Kirby Faciane / KAJR Faciane) |
| Abstract: | This study identifies patterns of Turkish direct investment (TDI) into 19 of the former centrally planned economies during the period of 1995 - 2001. The countries covered are the former Soviet Republics of Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan, and the nine Central and Eastern European countries including Albania, Bulgaria, Bosnia, the Czech Republic, the Slovak Republic, Macedonia, Hungary, Poland, and Romania. The opening-up of Central Eastern Europe (CEE) and Commonwealth of Independent States (CIS) markets since 1989 has created new opportunities for investors. The common characteristic of these countries is that they are all still in a state of transition, moving from a centrally planned economy to an open market economy. Nevertheless, this has given an ample opportunity to Turkish companies to invest in these countries to which Turkey has geographical proximity and with some of those it has even cultural proximity. In the past, like many other developing countries, a limited number of Turkish companies had invested abroad and the total amount of TDI was negligible. The purpose is to explore the TDI in the CEE and C1S countries, which has not been studied previously. Because of unavailability of relevant data, this study is a pioneering work for ground building for further empirical studies. Nevertheless, it provides a systematic picture of investments by Turkish firms in a conceptual framework to understand their internalization process. |
| Keywords: | Turkey; international investment; |
| JEL: | E E0 F1 F2 O |
| Date: | 2005–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0501005&r=cwa |
| By: | Luigi Bonaventura (Department of Labor Studies, University of Milan, Italy) |
| Abstract: | – This paper examines the phenomenon of the underground economy. We analyze the choice by firms and workers to carry out their economic activities within the formal economy context (regular economy) or the underground economy context (irregular economy). We assume that there are two types of labor markets, a regular one, and a irregular one; and starting from a coordinated interaction between the firm and the worker we show the existence of multiple symmetric equilibria in each market. The proposed game of coordination (2x2), can be interpreted as a pre-contract interaction between the agents through which they determine in which labor market they will “meet”. In the model, we insert an exogenous policy parameter (t) that measures the impact of legislative policy interventions on the regular labor market. The parameter takes on a positive value with respect to those interventions that increase the incentives to operate in the regular market. Through the utilization of evolutionary dynamics we can explicate the mechanism that leads the system towards one of the two equilibria, and explain the fact that these equilibria are sustained among the different populations (firms and workers) by taking on the role of a social norm. In this framework, we show that policy interventions (t) do not alter the choice dynamics of each actor, nor do they eliminate the probability of having certain dynamics that push the system towards the underground market, even where there are strong incentives for acting in the regular economy. |
| Keywords: | Underground Labor Market, Social Norms, Evolutionary Games, Policy Incentives |
| JEL: | J41 J42 O17 |
| Date: | 2005–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0501008&r=cwa |
| By: | Ila Patnaik (ICRIER); Ajay Shah (Ministry of Finance) |
| Abstract: | Many observers have expressed concerns about the impact of a rise in interest rates upon banks in India. In this paper, we measure the interest rate risk of a sample of major banks in India, using two methodologies. The first consists of estimating the impact upon equity capital of certain interest rate shocks. The second consists of measuring the elasticity of bank stock prices to fluctuations in interest rates. We find that as of 31 March 2002, many major banks had economically significant exposures. Using the first approach, we find that roughly two-thirds of the banks in the sample stood to gain or lose over 25% of equity capital in the event of a 320 bps move in interest rates. Using the second approach, we find that the stock prices of roughly one-third of the banks in the sample had significant sensitivities. |
| Keywords: | Interest rate risk, interest rate volatility |
| Date: | 2005–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpri:0501003&r=cwa |