nep-ifn New Economics Papers
on International Finance
Issue of 2011‒11‒28
four papers chosen by
Ajay Shah
National Institute of Public Finance and Policy

  1. Does G-4 Liquidity Spill Over? By Tao Sun; L. Effie Psalida
  2. Financial Integration and Rebalancing in Asia By Runchana Pongsaparn; Olaf Unteroberdoerster
  3. Impact of US Quantitative Easing Policy on Emerging Asia By Morgan, Peter J.
  4. Management of Exchange Rate Regimes in Emerging Asia By Rajan, Ramkishen

  1. By: Tao Sun; L. Effie Psalida
    Abstract: The resumption of strong capital flows into emerging markets in mid-2009 brought back the debate over whether pull or push factors are the main determinants. This paper, using panel specifications with alternative measures of global liquidity, asks the question whether G-4 liquidity expansion spills over to the rest of the world. The paper finds strong positive links between G-4 liquidity expansion and asset prices, such as equities, in the liquidity receiving economies, which indicates that the push factor plays an important role in asset prices. Liquidity also has a strong positive link with the accumulation of official reserves and with equity portfolio inflows in receiving economies. Moreover, the association between excess equity returns, excess credit growth, and global liquidity has implications for rising risks to financial stability in the receiving economies.
    Keywords: Capital inflows , Emerging markets , Exchange rate regimes , Exchange rates , Liquidity , Spillovers ,
    Date: 2011–10–17
  2. By: Runchana Pongsaparn; Olaf Unteroberdoerster
    Abstract: The paper shows that Asia’s degree of financial integration, both with the world and within the region remains low by various measures. The paper also provides empirical evidence that greater financial integration can support economic rebalancing in statistically meaningful ways. The implication is that in the debate on managing capital inflows the longer-term benefits of financial openness for broader-based growth should not be forgotten.
    Keywords: Asia , Economic integration , Capital inflows , Foreign investment , Exchange restrictions , Capital account liberalization , Economic growth ,
    Date: 2011–10–21
  3. By: Morgan, Peter J. (Asian Development Bank Institute)
    Abstract: The adoption of quantitative easing (QE) policy by the United States (US) Federal Reserve Bank since early 2009 has aroused widespread concerns in Asia and elsewhere regarding its possible impact in terms of the weakening of the US dollar and stimulating capital outflows to emerging economies that might increase inflationary pressures in them. This report investigates possible impacts of US quantitative easing policy on Asian economies and financial markets.
    Keywords: quantitative easing; federal reserve bank; asian economies; emerging asia; financial markets
    JEL: E43 E52 E58 F31 F32
    Date: 2011–11–18
  4. By: Rajan, Ramkishen (Asian Development Bank Institute)
    Abstract: This paper revisits the issue of exchange rate regimes in emerging Asia. It is divided into two main parts. The first part compares de jure and de facto exchange rate regimes in Asia over the decade 1999–2009. The second part focuses on the sustained stockpiling of reserves in developing and emerging Asian economies since 2000 (interrupted only briefly by the global financial crisis). The paper concludes with some observations on the management of Asian currencies in light of the global financial crisis and concerns about global imbalances.
    Keywords: exchange rate regimes; exchange rate management; emerging asia; global financial crisis; global imbalances
    JEL: F14 F31 F41
    Date: 2011–11–18

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