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on Central and Western Asia |
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Issue of 2011‒06‒04
five papers chosen by Bibhu Prasad Nayak Institute for Social and Economic Change |
| By: | Bukhari, Syed Kalim Hyder; Abdul , Jalil; Rao, Nasir Hamid |
| Abstract: | This paper is an attempt to revisit the pioneering work of Riazuddin and Khan (2002). A complete business cycle has been elapsed (2002-2010) since their study, so there is need to review the results with additional information. This revisited attempt, based on a theoretically specified framework, arrived at similar results and found significant impact of Islamic calendar. The Islamic months of Ramadan and Zilhaj have positive impact on currency holdings and negative impact on deposits. Although stylized facts indicate that consumer prices are significantly higher during Ramadan but econometric investigation rejects the upward exogenous shifts in prices during Ramadan. Therefore, structural relationship analyzed in co-integration framework has shown that inflation is not directly impacted by the Ramadan but indirectly through increase in its determinants. Inflationary tendencies during Ramadan are not due to exogenous increase by producers and retailers but possibly due to demand surge in the wake of redistribution of income. The months of June and December have positive effects on deposits and negative effects on currency in circulation indicating the presence of window dressing. Finally, as seasonal factors have important role in determining economic time series, therefore, ignoring those in monthly time series models will lead to omitted variable bias and inappropriate forecasts. |
| Keywords: | currency in circulation; deposits; cointegration; seasonal factors |
| JEL: | C1 |
| Date: | 2011–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31124&r=cwa |
| By: | Fuchs, A.; Klann, N. |
| Abstract: | The Chinese government frequently threatens that meetings between its trading partners’ officials and the Dalai Lama will be met with animosity and ultimately harm trade ties with China. We run a gravity model of exports to China from 159 partner countries between 1991 and 2008 to test to which extent bilateral tensions affect trade with autocratic China. In order to account for the potential endogeneity of meetings with the Dalai Lama, the number of Tibet Support Groups and the travel pattern of the Tibetan leader are used as instruments. Our empirical results support the idea that countries officially receiving the Dalai Lama at the highest political level are punished through a reduction of their exports to China. However, this ‘Dalai Lama Effect’ is only observed for the Hu Jintao era and not for earlier periods. Furthermore, we find that this effect is mainly driven by reduced exports of machinery and transport equipment and that it disappears two years after a meeting took place. |
| Keywords: | International Trade, International Political Economy, Diplomatic Relations, Exports to China, Tibet, Dalai Lama |
| JEL: | F13 F51 F59 |
| Date: | 2011–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1103&r=cwa |
| By: | Chow, Hwee Kwan (Asian Development Bank Institute) |
| Abstract: | Notwithstanding incumbency advantages and network effects enjoyed by the United States (US) dollar, considerations about the stability of its value have led Asian countries to fear they are holding their foreign exchange reserves in a depreciating currency. At the same time, it pays for the regional countries to adjust their reserve currency composition to match the point of reference of their exchange rate policy. This paper examines empirically which regional currency or currencies seem to matter for exchange rate determination in Asia beyond the very short term. To this end, we employ country-specific Vector Autoregressive (VAR) models to compare the relative impact which fluctuations in the Asian Currency Unit (ACU), yuan and yen separately have on movements of Asian currencies. Contrary to recent evidence based on daily data, we found monthly exchange rates variations in the region are more heavily influenced by the cumulative effect of key Asian currencies than by the yuan or the yen individually within the sample period we used. To the extent that exchange rates in the region shift over time from benchmarking the US dollar towards a broad range of Asian currencies, Asian central banks will find it more attractive to cross-hold Asian bonds. This calls for the development of deep private markets in such assets, as well as institutional prerequisites for internationalizing key regional currencies. |
| Keywords: | asian currency unit; asian currencies; foreign exchange reserves; exchange rate policy; asian central banks |
| JEL: | F31 F33 |
| Date: | 2011–05–27 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0285&r=cwa |
| By: | Nepal, R.; Jamasb, T. |
| Abstract: | This paper assesses the electricity sector reforms across small power systems while citing Nepal as an example. The on-going political instability and increasing electricity demand make power sector reform in Nepal and similar small systems a more complex process. As international reform experiences provide plenty of lessons to learn; raising electricity tariffs and adjusting subsidies in the presence of an effective regulation body are important in the short and medium term. The creation of an effective regulatory commission is also more urgent than unbundling the sector in smaller systems though accounting separation may sometimes be desirable as in the present context in Nepal. In the long run as the system grows, vertical separation and competitive privatisation may be pursued together with the creation of a functioning wholesale market by horizontally splitting the generation segments. |
| JEL: | L52 L94 Q48 |
| Date: | 2011–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1133&r=cwa |
| By: | HIGUCHI Yoshio; ISHII Kayoko; SATO Kazuma |
| Abstract: | International comparison analyses have clarified that the relative poverty rate among working households in Japan is high. Based on this fact, this study analyzed the relationship between poverty and work, using the Keio Household Panel Survey 2004-2010 (KHPS). Our study showed that households where the head of the household is working as a temporary worker have a higher probability of being in poverty than households where the head of the household is unemployed and not engaged in any other income-earning activity. However, concerning the poverty dynamic, households where the head of the household is working in any capacity including temporary work are more likely to exit from poverty than households where the head of the household is not working. Needless to say, households where the head of the household is working as a regular worker have the least probability of falling into poverty, and shifting from temporary work to regular work is an effective solution for the working poor. Because of this fact, our study also analyzed the probability of shifting from temporary workers to regular workers. Results for women showed that those who invest in self-development are more likely to make the shift from temporary workers to regular workers; accordingly, investing in human capital—for instance, in the form of self-training—is important for making this shift. Moreover, among the unemployed who are in poverty, those receiving unemployment benefits and investing in job-training are more likely to get out from poverty than those not eligible for unemployment benefits. This implies that it is necessary to build a support system for those who are not eligible for unemployment benefits. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:11056&r=cwa |