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on South East Asia |
| By: | Rahardja, Sjamsu |
| Abstract: | This paper investigates the extent of China ' s export boom in machinery and analyzes trade in components and finished machinery between China and Southeast Asia. China has increased its world market share in machinery exports. The median relative unit value of its finished machinery exports has also risen. Yet the author finds no evidence that China ' s expansion in the world machinery market has squeezed the market shares of Southeast Asian machinery exports. Instead, components made by Southeast Asian countries are increasing in unit value and gaining market share in China. |
| Keywords: | Markets and Market Access,Economic Theory & Research,Free Trade,General Manufacturing,Debt Markets |
| Date: | 2007–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4297&r=sea |
| By: | Suleiman Abu-Bader (Department of Economics, Ben-Gurion University of the Negev); Aamer Abu-Qarn (Department of Economics, Ben-Gurion University of the Negev) |
| Abstract: | In this study we test for structural changes in international trade patterns of 77 countries over the post-WWII period, to examine if they experienced a substantial increase in their trade ratios following major GATT rounds such as the Kennedy Round, or after joining GATT. Our results show that trade ratios of most of these countries exhibited structural breaks in their time paths, however, most of the postbreak paths were below the extrapolated prebreak paths. Furthermore, while the significant break years coincided closely with major regional and international events such as the oil shocks of the 70s and the East-Asian financial crisis in 1997, they occurred far before or after the time of a country's accession to GATT or the time of the major GATT rounds. |
| Keywords: | International Trade, Trade Liberalization, Structural Change, Oil Shocks, Kennedy Round, East Asia, Financial Crisis |
| JEL: | C22 F1 F13 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:bgu:wpaper:239&r=sea |
| By: | Rod Tyers; Jane Golley; Iain Bain |
| Abstract: | International pressure to revalue China’s currency stems in part from the expectation that rapid economic growth should be associated with a real exchange rate appreciation. This hinges on the Balassa-Samuelson hypothesis under which economic growth, stemming from improvements in traded sector productivity, causes non-traded prices to rise. The puzzle is that, while evidence on China’s productivity and prices supports this hypothesis, its real exchange rate has shown no long run tendency to appreciate. Resolution requires extension of the hypothesis to allow for effects on the real exchange rate due to non-traded productivity improvements or, in association with failures of the law of one price for traded goods, labour supply growth and growth-related demand switches due to changes in financial capital flows and trade distortions. The sensitivity of China’s real exchange rate to these determinants is reviewed with the results confirming that financial and capital outflows are dominant depreciating forces in the short run. Along with WTO accession trade reforms, it is shown that the heretofore rising surplus of Chinese domestic saving over its investment has restrained the real exchange rate from appreciating since the late 1990s. |
| JEL: | C68 C53 E27 F21 F43 F47 O11 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2007-14&r=sea |
| By: | Simon Gilchrist (Boston University and NBER); Jae W. Sim (Boston University) |
| Abstract: | Without capital market imperfections, the capital structure of a firm, including the size, the maturity and the currency composition of debts, should not matter for investment decisions. The Asian financial crises provide a good opportunity to test this hypothesis. We approach the problem in two ways: First, we apply a conventional reduced-form analysis to a panel data of Korean manufacturing firms, arguing that the devaluation that occurred during the crisis provides a natural experiment in which to assess the effect of balance sheet shocks to investment. Second, we use indirect inference to estimate a structural dynamic programming problem of a firm with foreign debts and financial constraints. Both reduced-form evidence and structural parameter estimates imply an important role for finance in investment at the firm level. Counterfactual simulations imply that balance sheet effects may account for 50% to 80% of the drop in investment during the crisis period. Although our estimates suggest that foreign denominated debt had relatively little effect on aggregate investment spending for the Korean economy during this crisis episode, counterfactual experiments imply sizeable contractions in investment through this mechanism for economies that are more heavily dependent on foreign-denominated debt. |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2007-001&r=sea |
| By: | Cheung, Yin-Wong; Yuk-Pang Wong, Clement |
| Abstract: | Using available annual data of 174 economies since 1957, we examine the similarities and differences of seven international reserve ratios. While individual international reserve ratios display substantial variations across economies, they are associated with an economy’s characteristics including geographic location, income level, stage of development, degree of indebtedness, and exchange rate regime. The association pattern varies across time and type of international reserve ratios. Interestingly, there is only limited evidence that Asian and non-Asian economies have significantly different international reserve hoarding behavior. Our results suggest that the inference about whether an economy is hoarding too many or too few international reserves depends on the choice of international reserve ratio. Further, different international reserve ratios exhibit different persistence profiles, but the evidence of dependence on structural characteristics is rather weak. |
| Keywords: | International Reserve Ratios, Structural Characteristics, Cross-Economy Analysis |
| JEL: | F30 F40 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:5729&r=sea |
| By: | Arze del Granado, Javier; Fengler, Wolfgang; Ragatz, Andrew; Yavuz, Elif |
| Abstract: | What is the current level and main characteristics of public education spending in Indonesia? Is education spending insufficient? Is education spending efficient and equitable? This study reports the first account of Indonesia’s aggregated (national and sub-national) spending on education, as well as the economic and sub-functional (by programs) composition of education expenditures. It presents estimations of the expected (average) level of education spending for a country with similar economic and social characteristics. It sheds light on efficiency and equity of education spending by presenting social rates of return by level of education, an assessment of the adequacy of current teacher earnings relative to other paid workers, the distribution of teachers across urban, rural, and remote regions, and the determinants of education enrollment. It concludes that the current challenges in Indonesia are not anymore defined by the need to increase spending on the supply side, but rather to improve the quality of education services, and to improve the efficiency of education expenditures by re-allocating teachers to undersupplied regions and re-adjusting the spending mix within and between education programs of future additional spending in the sector. The study finds that poverty and student-aged labor are also significant constraints to education enrollment, stressing the importance of policies aimed to address demand-side factors affecting education access in Indonesia. |
| Keywords: | education Indonesia; expenditures education Indonesia; Indonesia's education; quality education; efficiency of education expenditures; equity of education expenditures; rates of return; teacher wages indonesia; education 20% rule Indonesia |
| JEL: | H41 I28 I22 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4372&r=sea |
| By: | Sirtaine, Sophie; Skamnelos, Ilias |
| Abstract: | High credit growth in Emerging Europe, generally considered a sign of catching-up with the " old " Europe, has begun receiving considerable attention among investors and policymakers alike. Given heightened global risks and the demands under the European Union accession process, the need to better understand this high credit growth ' s drivers, riskiness, and the possible macroeconomic and financial stability consequences is strong. The authors adopt a holistic approach in reviewing the rapid credit growth experienced in the region, examining macroeconomic, financial sector, corporate sector, and asset market consequences and possible vulnerabilities. They consider three possible scenarios-a catching-up with older European countries, a soft landing as experienced by Portugal in the early 2000s, and a hard landing as experienced by Asia in 1997. |
| Keywords: | Banks & Banking Reform,Financial Intermediation,Financial Crisis Management & Restructuring,Economic Theory & Research,Investment and Investment Climate |
| Date: | 2007–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4281&r=sea |
| By: | Cranfield, J. A. L.; Preckel, Paul V.; Hertel Thomas W. |
| Abstract: | This paper proposes a new method for ex ante analysis of the poverty impacts arising from policy reforms. Three innovations underlie this approach. The first is the estimation of a global demand system using a combination of micro-data from household surveys and macro-data from the International Comparisons Project (ICP). Estimation is undertaken in a manner that reconciles these two sources of information, explicitly recognizing that per capita national demands are an aggregation of the disaggregated, individual household demands. The second innovation relates to a methodology for post-estimation calibration of the global demand system, giving rise to country-specific demand systems and an associated expenditure function which, when aggregated across the expenditure distribution, reproduce observed per capita budget shares exactly. This leads to the third innovation, which is the establishment of a unique poverty level of utility and an appropriately modified set of Foster-Greer-Thorbecke poverty measures. With these tools in hand, the authors are able to calculate the change in the head-count of poverty, poverty gap, and squared poverty gap arising from policy reforms, where the poverty measures are derived using a unique poverty level of utility, rather than an income or expenditure-based measure. They use these techniques with a demand system for food, other nondurables and services estimated using a combination of 1996 ICP data set and national expenditure distribution data. Calibration is demonstrated for three countries for which household survey expenditure data are used during estimation-Indonesia, the Philippines and Thailand. To show the usefulness of these calibrated models for policy analysis, the authors assess the effects of an assumed 5 percent food price rise as might be realized in the wake of a multilateral trade agreement. Results illustrate the important role of subsistence expenditures at lowest income levels, but of discretionary expenditure at high er income levels. The welfare analysis underscores the relatively large impact of the price hike on poorer households, while a modified Foster-Greer-Thorbecke poverty measure shows that the 5 percent price rise increases the incidence and intensity of poverty in all three cases, although the specific effects vary considerably by country. |
| Keywords: | Markets and Market Access,Economic Theory & Research,Population Policies,Rural Poverty Reduction,Poverty Lines |
| Date: | 2007–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4285&r=sea |
| By: | Hammond, Peter J. (Department of Economics, University of Warwick,); Sun, Yeneng (Department of Economics, National University of Singapore) |
| Abstract: | An extensive literature in economics uses a continuum of random variables to model individual random shocks imposed on a large population. Let H denote the Hilbert space of square-integrable random variables. A key concern is to characterize the family of all H-valued functions that satisfy the law of large numbers when a large sample of agents is drawn at random. We use the iterative extension of an infinite product measure introduced in [6] to formulate a “sharp” law of large numbers. We prove that an H-valued function satisfies this law if and only if it is both Pettis-integrable and norm integrably bounded. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:806&r=sea |