nep-sea New Economics Papers
on South East Asia
Issue of 2006‒01‒29
four papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Searching for the accounting features of capitalism: an illustration with the economic transition process in China By Chiapello, Eve; Ding, Yuan
  2. Fiscal federalism in big developing countries: China and India By Fraschini, Angela
  3. Asian Regionalism versus Global Free Trade: A Simulation Study on Economic Effects By Pekka Sulamaa; Mika Widgrén
  4. Inflation Targeting Arrangements in Asia: Exploring the Role of the Exchange Rate By Tony Cavoli; Ramkishen S. Rajan

  1. By: Chiapello, Eve; Ding, Yuan
    Abstract: In this paper, the authors show that capitalism and double-entry bookkeeping are not indissociably interconnected as Sombart argued in his book in 1916. Indeed, the double-entry bookkeeping accounting system was also adopted by anti-capitalist countries where a new economic system was set up. A study of how accounting has changed with the economic transition in China helps us identify those "accounting features" required for a capitalist economy that clearly differ from those needed for the planned and centralized economy.
    Keywords: capitalism; communism; accounting; China; reform; transitional economy
    JEL: B24 M41 P16
    Date: 2005–01–01
  2. By: Fraschini, Angela
    Abstract: In South and East Asian countries a highly centralized government prevails, although recently some trends are moving toward a greater degree of decentralization. Also the two giants China and India, which cannot rely on a merely centralized Government, have experienced a greater or lesser degree of fiscal unionism. As to China the local government system provides four levels: provincial level; city level; county level; township level. Intergovernmental fiscal relations were revamped by the 1994 reform that established a new tax sharing system and gave local governments more control over the administration of local taxes but no significant degree of tax autonomy and no substantial expenditure assignments. The local financial revenue mainly derives from local taxes, shared taxes, and nontax revenue. As to India, the federal system is quite complex. The center-states relations are envisaged in the Constitution also for the financial aspects: two constitutional amendments adopted in 1992 made India one of the most politically decentralized countries among developing ones. However, the implementation of the decentralization program is still lagging: till now India seems to have considered decentralization mainly in terms of the local election system, without the transfer of all functions provided for devolution to local bodies. Only India set up a different system of local bodies in rural and urban areas with different expenditure responsibilities and financing powers. On the contrary, China has a unitary fiscal system. In India it is necessary to redesign the transfer system to improve accountability, incentives and equity, whereas in China, the fiscal revenue sharing schemes limit intergovernmental budget transfers. Finally, the rule of hard budget constraint in China is faced by all levels of government, while in India sub-national governments face soft budget constraint.
    Date: 2006–01
  3. By: Pekka Sulamaa; Mika Widgrén
    Keywords: free trade, regionalism, GTAP model, F15; F17
    Date: 2005–06–01
  4. By: Tony Cavoli (School of Economics, University of Adelaide, Australia); Ramkishen S. Rajan (School of Public Policy, George Mason University, VA, USA)
    Abstract: Since the Asian crisis it has been recognized that exchange rate and monetary policy strategies must involve a “fairly high” element of flexibility rather than a single-minded defense of a particular rate. One way this flexibility might be introduced is by a country adopting an open economy inflation targeting arrangement. This particular policy regime has been officially implemented in several Asian countries in recent years, but the normative implications of inflation targeting appear at times to be at odds with the requirements regarding exchange rate flexibility. This paper presents an analysis of some of the issues relevant to Asian central banks implementing an inflation targeting arrangement with specific focus on the role of the exchange rate.
    Keywords: Asia, exchange rate regime, inflation targeting arrangement, fear of floating, monetary policy rule, pass through

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