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on South East Asia |
| By: | Christopher Edmonds (East-West Center and Department of Economics at the University of Hawaii at Manoa); Sumner J. La Croix (Department of Economics, University of Hawaii at Manoa); Yao Li (East-West Center) |
| Abstract: | This paper undertakes a detailed review of the policies that have shaped China's explosion of a global supply of exports, and examines long trend statistics on the evolution of China's trading partners and the goods it trades in the post-reform period. This review notes common characteristics in China's trade experience with those of earlier successful export-based economies of East Asia, such as South Korea and Japan. The survey finds that China's pattern of trade and trading partners are similar to those of more market-based Asian economies, but that the Chinese economy's orientation toward foreign trade is considerably greater than expected for an economy of its size and level of development. The authors argue that China still has a long way to go in terms of its export boom, especially if compared to the experiences of South Korea, Japan, and Taiwan. This suggests that China is on track to become one of the world's most formidable trading powers and its export policies and export performance will exert increasing influence on how the global trade regime evolves in the future. |
| URL: | http://d.repec.org/n?u=RePEc:ewc:wpaper:wp88&r=sea |
| By: | Eiji Ogawa; Kentaro Kawasaki |
| Abstract: | East Asian countries, for example "ASEAN plus three countries" (China, Korea, and Japan), have been well cognizant of importance of the regional financial cooperation since the Asian currency crisis in 1997. They have established the Chiang Mai Initiative (CMI) to manage currency crises. However, the CMI is not designed for "crisis prevention" because it includes no more than soft surveillance process as well as a network of currency swap arrangements. The surveillance process should be conducted over intra-regional exchange rates and exchange rate policies of the regional countries in order to stabilize intra-regional exchange rates in a situation of a strong economic relationship among the regional countries. On one hand, the regional exchange rate stability is related with an optimum currency area. Based on a Generalized PPP model, which detects a cointegration relationship among real effective exchanges rates, we investigate whether the region composed of "ASEAN plus three countries" is an optimum currency area. In the investigation, our interest is focused on an issue whether the Japanese yen could be regarded as an "insider" currency as well as other East Asian currencies. Or, is the Japanese yen still an "outsider" which is used as a target currency of foreign exchange rate policy for other East Asian countries. We employ a Dynamic OLS to estimate the long-term relationship among the East Asian currencies in a currency basket. Our empirical results indicate that the Japanese yen works as an exogenous variable in the cointegration system during a pre-crisis period while it works as an endogenous one during a post-crisis period. It implies that the Japanese yen could be regarded as an insider currency as well as other East Asian currencies after the crisis although it is regarded as an outsider currency as well as the US dollar and the euro before the Asian crisis. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:06028&r=sea |
| By: | Gregor Smith (Queen's University) |
| Keywords: | Phillips curve, Japan |
| JEL: | E31 E24 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:qed:wpaper:1083&r=sea |
| By: | Horst Siebert |
| Abstract: | This paper analyzes China's economic performance in the last 25 years and discusses its prospect for growth in the future. China has enjoyed high annual GDP growth rates of about ten percent in the last 25 years. Exports and investment were the two driving forces of the growth process. FDI plays an important role. However, property rights, a crucial element in transforming a communist society, are far from being clearly developed. Structural issues such as the state-owned firms and the loss-making of the banking industry have to be solved. Monetary policy is complicated by the accumulation of reserves. Major policy issues in the future include the institutional deficit, especially with respect to the rule of law and the lack of democracy. |
| Keywords: | Growth process, FDI, developing countries, transformation, exchange rate policy, property rights, future scenarios |
| JEL: | E2 E4 F10 F43 K |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1278&r=sea |
| By: | Deng Quheng (Chinese Academy of Social Sciences); Bjorn Gustafsson (University of Göteborg and IZA Bonn) |
| Abstract: | In China hukou (the household registration system) imposes barriers on permanent migration from rural to urban areas. Using large surveys for 2002, we find that permanent migrants number about 100 million persons and constitute approximately 20 percent of all urban residents. Receiving a long education, being a cadre or becoming an officer in the People’s Liberation Army are important career paths towards urbanisation and permanent migrants are much better-off then their counterparts left behind in rural China. The probability of becoming a permanent migrant is positively related to parental education, belonging to the ethnic majority and the parent’s membership in the Communist Party. At the destination, most permanent migrants are economically well-integrated. They have a higher probability to be working than their urban-born counterparts and those who receive a hukou before age 25 typically earn at least as much as their urban-born counterparts. The exceptions for this are those permanent migrants who receive a hukou after age 25 and people who received their hukou through informal routes. |
| Keywords: | China, hukou, rural-to-urban migration |
| JEL: | J61 O15 P36 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2152&r=sea |
| By: | Christopher Edmonds (East-West Center and Department of Economics at the University of Hawaii at Manoa); James Mak (Department of Economics, University of Hawaii at Manoa) |
| Abstract: | The paper reviews trends in travel and tourism in selected Asia Pacific countries before and after the terrorist attacks of September 11, 2001 (9/11) to consider the question of whether or not global tourism has fundamentally changed since 9/11. Tourism is an important economic sector in several Asia Pacific countries and is a "fragile" industry in that it is highly susceptible to external shocks such as wars, outbreaks of deadly contagious diseases, incidents of terrorism, and so on. The first part of the paper presents a stylized picture of industry response following terrorist incidents and other major negative shocks to tourism, and reviews international tourist arrivals at selected Asia Pacific destinations. A richer body of data available for Japan and the U.S. allows examination of the extent of substitution between domestic and international travel, and the impact of changed travel behavior on tourist spending. The paper finds that there has been significant substitution of domestic travel for overseas travel by nationals of both countries after 9/11, and that this has had a dramatic impact on the Hawaii tourism market. The paper explores some of the reasons for the differences observed in post-9/11 travel recoveries across Asia Pacific countries. |
| URL: | http://d.repec.org/n?u=RePEc:ewc:wpaper:wp86&r=sea |
| By: | John Gibson (University of Waikato); Susan Olivia (University of California, Davis); Scott Rozelle (University of California, Davis) |
| Abstract: | This paper investigates whether there is a non-linear relationship between income and the private transfers received by households in developing countries. If private transfers are unresponsive to household income, expansion of public social security and other transfer programs is unlikely to crowd out private transfers, contrary to concerns first raised by Barro and Becker. There is little existing evidence for crowding out effects in the literature, but this may be because they have been obscured by methods that ignore non-linearities. If donors switch from altruistic motivations to exchange motivations as recipient income increases, a sharp non-linear relationship between private transfers and income may result. In fact, threshold regression techniques find such non-linearity in the Philippines and after accounting for these there is evidence of serious crowding out, with 30 to 80 percent of private transfers potentially displaced for low-income households [Cox, Hansen and Jimenez 2004, 'How Responsiveare Private Transfers to Income?' Journal of Public Economics]. To see if these non-linear effects occur more widely, semiparametric and threshold regression methods are used to model private transfers in four developing countries - China, Indonesia, Papua New Guinea and Vietnam. The results of our paper suggest that non-linear crowding-out effects are not important features of transfer behaviour in these countries. The transfer derivatives under a variety of assumptions only range between 0 and -0.08. If our results are valid, expansions of public social security to cover the poorest households need not be stymied by offsetting private responses. |
| Keywords: | crowding out; private transfers; social security |
| JEL: | H55 O15 |
| Date: | 2006–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:06/01&r=sea |
| By: | Kozo Kiyota |
| Abstract: | This paper presents a computational analysis of the potential economic effects of trade liberalization in various regional and bilateral free trade agreements (FTAs) that have been negotiated in recent years and the negotiations currently in process, as well as the effects of global (multilateral) free trade. The analysis is based on the Michigan Model of World Production and Trade. The major findings are summarized as follows. First, the effects of regional FTA are larger than those of bilateral FTA. Second, among FTA member countries, small countries have larger benefits (in terms of the percentage of GDP) than large countries. Finally, the effects of multilateral free trade are significantly larger than those of bilateral and regional FTAs. |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:06027&r=sea |
| By: | Özlem Onaran (Department of Economics, Vienna University of Economics & B.A.) |
| Abstract: | The aim of this paper is to analyze the pattern of speculation-led growth in Turkey. It is dependent on international capital flows, whose continuity becomes more and more critical given the current account deficit, which is estimated to reach 6.1% as a ratio to GDP at the end of 2005. The paper assesses the sustainability of this speculation-led growth in the context of EU enlargement and compares the current state of fragility with former crises in Turkey as well as in East Asia and Latin America. Following a severe financial crisis in 2001, Turkey has entered a new phase of fragile growth led by boom-euphoric expectations. The paper aims at explaining this new phase and the evolution of the risk perceptions of both the creditors as well as the debtors in this "speculation game" based on the post-Keynesian/Minskyan concepts of endogenous expectations and financial fragility. |
| JEL: | E12 G15 G32 O52 |
| Date: | 2006–05 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp093&r=sea |
| By: | Peter F. Christoffersen (McGill University and CIRANO); Francis X. Diebold (Department of Economics, University of Pennsylvania); Roberto S. Mariano (Singapore Management University); Anthony S. Tay (Singapore Management University); Yiu Kuen Tse (Singapore Management University) |
| Abstract: | Recent theoretical work has revealed a direct connection between asset return volatility forecastability and asset return sign forecastability. This suggests that the pervasive volatility forecastability in equity returns could, via induced sign forecastability, be used to produce direction-of change forecasts useful for market timing. We attempt to do so in an international sample of developed equity markets, with some success, as assessed by formal probability forecast scoring rules such as the Brier score. An important ingredient is our conditioning not only on conditional mean and variance information, but also conditional skewness and kurtosis information, when forming direction-of-change forecasts. |
| Keywords: | Volatility, variance, skewness, kurtosis, market timing, asset management, asset allocation, portfolio management |
| JEL: | G10 G12 |
| Date: | 2006–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:06-016&r=sea |
| By: | Alessandro Beber; Michael W. Brandt |
| Abstract: | We establish an empirical link between the ex-ante uncertainty about macroeconomic fundamentals and the ex-post resolution of this uncertainty in financial markets. We measure macroeconomic uncertainty using prices of economic derivatives and relate this measure to changes in implied volatilities of stock and bond options when the economic data is released. We also examine the relationship between our measure of macroeconomic uncertainty and trading activity in stock and bond option markets before and after the announcements. Higher macroeconomic uncertainty is associated with greater reduction in implied volatilities. Higher macroeconomic uncertainty is also associated with increased volume in option markets after the release, consistent with market participants waiting to trade until economic uncertainty is resolved, and with decreased open interest in option markets after the release, consistent with market participants using financial options to hedge macroeconomic uncertainty. The empirical relationships are strongest for long-term bonds and weakest for non-cyclical stocks. |
| JEL: | G1 |
| Date: | 2006–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12270&r=sea |