nep-sea New Economics Papers
on South East Asia
Issue of 2008‒08‒06
eight papers chosen by
Kavita Iyengar
Asian Development Bank

  2. A journey through the secret history of the Flying Geese Model By Kumagai, Satoru
  3. The IDE geographical simulation model : predicting long-term effects of infrastructure development projects By Kumagai, Satoru; Gokan, Toshitaka; Isono, Ikumo; Souknilanh, Keola
  4. Asian Industrialization: A strategic analysis with a memorandum on the Australian response By Huw McKay
  5. Collective action to secure property rights for the poor: A case study in Jambi Province, Indonesia By Komarudin, Heru; Siagian, Yuliana L.; Colfer, Carol J. Pierce; Neldysavrino; Yentirizal; Syamsuddin; Irawan, Deddy
  6. Carbon Emissions and Economic Growth: Homogeneous Causality in Heterogeneous Panels By David Maddison; Katrin Rehdanz
  7. Impacts of Aid-Funded Technical Assistance Programs: Firm-Level Evidence from the Indonesian Foundry Industry By TODO Yasuyuki
  8. Inflation Targeting and Communication: Should the Public Read Inflation Reports or Tea Leaves? By Ales Bulir; Katerina Smidkova; Viktor Kotlan; David Navratil

  1. By: Reza Siregar; Siwei Goo
    Abstract: The chief objective of our paper is to highlight basic features of the IT policies adopted by Indonesia and Thailand, and to evaluate their overall performances. These economies have seen their inflation rates to decline during the post-IT period, and pass-through rates for both tradable and non-tradable prices in the two emerging markets have also declined. More importantly, no trade-offs between output growth and inflation have been reported. The implementations of the IT policy in these two Southeast Asian economies have however largely been “flexible” rather than “strict”, seeking the balance between minimizing output gap and achieving price stability.
    JEL: E52 E58 F31 F33
    Date: 2008–07
  2. By: Kumagai, Satoru
    Abstract: Economic development in East Asia is characterized by the sequential "take-off" of member countries. This multi-tiered economic development in East Asia is often termed the “Flying Geese†pattern of economic development. However, some authors argue that the traditional Flying Geese pattern is not applicable to some industries such as electronics. Here, Japan may no longer be the sole "leading goose", with "followers" such as China (now producing cutting-edge products) having "caught-up". Does this mean that the Flying Geese Model has become "obsolete" in the 21st century? The main objective of this paper is to clarify the two concepts of Flying Geese which now seem confused: (1) application of the pattern of economic development in one specific country, and (2) application of the pattern of economic development to multiple countries in sequence. This paper provides validity checks of Flying Geese Models after differentiating these two concepts more clearly
    Keywords: East Asia, Southeast Asia, Economic development, Development theory, Flying Geese Model
    JEL: F02 F19 N75 O10
    Date: 2008–06
  3. By: Kumagai, Satoru; Gokan, Toshitaka; Isono, Ikumo; Souknilanh, Keola
    Abstract: It is important to be able to predict changes in the location of populations and industries in regions that are in the process of economic integration. The IDE Geographical Simulation Model (IDE-GSM) has been developed with two major objectives: (1) to determine the dynamics of locations of populations and industries in East Asia in the long-term, and (2) to analyze the impact of specific infrastructure projects on the regional economy at sub-national levels. The basic structure of the IDE-GSM is introduced in this article and accompanied with results of test analyses on the effects of the East West Economic Corridor on regions in Continental South East Asia. Results indicate that border costs appear to play a big role in the location choice of populations and industries, often a more important role than physical infrastructures themselves.
    Keywords: Southeast Asia, East Asia, Economic geography, International economic integration, Geographical Simulation Model, Spatial economics
    JEL: D59 F29 O53 R49
    Date: 2008–06
  4. By: Huw McKay
    Abstract: This essay considers the economic performance of East Asia’s two largest economies in the second half of the twentieth century and debates prospects for the first half of the twenty-first. The discussion takes place in the context of dynamic strategy theory. First in Japan, and then later in China, ‘developmental’ states adopted strikingly successful industrialisation strategies with a common thread of outward orientation. Outward orientation is distinguished from export dependence. The former is an autocatalyzing sub-strategy that can sustain an economy all the way to full membership of the strategic core. Outright export dependent strategies, in contrast, are finite and imitative rather than auto-catalyzing, leaving their practitioners highly exposed to adverse external shocks. Japan’s experience of strategic rise, stagnation and eventual exhaustion is articulated at length to illustrate this important distinction. China’s own outward-oriented strategy, which is currently stimulating rapid economic growth and differs in many important respects from Japan’s, is then analysed in an attempt to examine its future viability. China’s prospects for adapting an alternative strategy prior to exhaustion are then considered. The conclusion is that it is reasonable to expect China’s strategic leadership to attempt to transition towards a sub-strategy that continues to sponsor industrialization through exploitation of the mass internal market in the broad context of outward orientation. Furthermore, the contemporary sub-strategy is clearly far from exhausting itself. However, the risks are consequential. On balance, prospects for a successful transition are sound but not overwhelming. An Asian-facing resource rich economy such as Australia should actively hedge the risks of unsuccessful transition. In the face of this uncertainty, Australian strategists are thankfully not facing an independent binary choice. To hedge against the possibility of the more pessimistic projections coming to fruition in China, thereby unhinging a resource dependent substrategy, Australia must make an independent effort to make an assertive move towards the upper echelons of productivity performance. This will involve a wholesale reassessment of the scale of national resources that should be directed to the innovation infrastructure.
    Keywords: Asian industrialisation, Chinese and Japanese strategic pursuit, dynamicstrategy theory, Snooksian strategy function, Australian economic policy
    JEL: N1 N15
    Date: 2008–06
  5. By: Komarudin, Heru; Siagian, Yuliana L.; Colfer, Carol J. Pierce; Neldysavrino; Yentirizal; Syamsuddin; Irawan, Deddy
    Abstract: "This study presents an approach to analyzing decentralized forestry and natural resource management and land property rights issues, and catalyzing collective action among villages and district governments. It focuses on understanding the current policies governing local people's access to property rights and decision making processes, and learning how collective action among community groups and interaction among stakeholders can enhance local people's rights over lands, resources, and policy processes for development. The authors applied participatory action research in two villages, one each in the Bungo and Tanjabbar districts of Jambi province (Sumatra), Indonesia, to facilitate identification of priorities through phases of planning, action, monitoring, and reflecting. This study finds that action research may be an effective strategy for fostering collective action and maintaining the learning process that leads groups to be more organized and cohesive, and district government officials to be more receptive to stakeholders. A higher level of collective action and support may be needed to avoid elite capture more effectively." authors' abstract
    Keywords: Decentralization, Natural resource management, Forest, Collective action, Property rights, Action research, Poverty, Devolution,
    Date: 2008
  6. By: David Maddison; Katrin Rehdanz
    Abstract: This paper introduces the concept of homogeneous non-causality in heterogeneous panels. This concept is used to examine a panel of data for evidence of a causal relationship between GDP and carbon emissions. The technique is compared to the standard test for homogeneous non-causality in homogeneous panels and heterogeneous non-causality in heterogeneous panels. In North America, Asia and Oceania the homogeneous non-causality hypothesis that CO2 emissions does not Granger cause GDP cannot be rejected if heterogeneity is allowed for in the data-generating process. In North America the homogeneous non-causality hypothesis that GDP does not cause CO2 emissions cannot be rejected either
    Keywords: Energy; Carbon Emissions; Granger Causality; and Heterogeneous Panels
    JEL: C12 O13 Q54
    Date: 2008–07
  7. By: TODO Yasuyuki
    Abstract: This study examines the effect of Japanese aid-funded technical assistance programs in the Indonesian foundry industry funded, applying difference-in-differences propensity score matching estimation to a unique firm-level dataset. The major finding is that the average effect of the aid programs on the change in the reject ratio is negative and significant, suggesting that these programs help local participant firms improve their technology. However, the effect of the programs is limited to their participants and does not spill over to non-participants. In addition, technical assistance programs provided by the local counterpart of aid after the completion of the aid programs do not seem to improve technology of participants on average.
    Date: 2008–07
  8. By: Ales Bulir; Katerina Smidkova; Viktor Kotlan; David Navratil
    Abstract: Inflation-targeting central banks have a respectable track record at explaining their policy actions and corresponding inflation outturns. Using a simple forward-looking policy rule and an assessment of inflation reports, we provide a new methodology for the empirical evaluation of consistency in central bank communication. We find that the three communication tools—inflation targets, inflation forecasts, and verbal assessments of inflation factors contained in quarterly inflation reports—provided a consistent message in five out of six observations in our 2000–05 sample of Chile, the Czech Republic, Hungary, Poland, Thailand, and Sweden.
    Keywords: Emerging markets, forecasting, inflation targeting, monetary policy, transparency.
    JEL: E31 E43 E47 E58
    Date: 2007–12

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