nep-sea New Economics Papers
on South East Asia
Issue of 2011‒08‒22
eight papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Exchange Rate Misalignments and World Imbalances: a FEER Approach for Emerging Countries By Nabil Aflouk; Se-Eun Jeong; Jacques Mazier; Jamel Saadaoui
  2. A Quantitative Assessment of Financial Conditions in Asia By D. Filiz Unsal; Carolina Osorio; Runchana Pongsaparn
  3. Who is benefiting from fertilizer subsidies in Indonesia ? By Osorio, Camilo Gomez; Abriningrum, Dwi Endah; Armas, Enrique Blanco; Firdaus, Muhammad
  4. Influence of age of child on differences in marital satisfaction of males and females in East Asian countries By Yamamura, Eiji; Andrés, Antonio
  5. The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey By Serhan Cevik; Joshua Charap
  6. Estimating the Break-Even Price for Forest Protection in Central Kalimantan By Yuki Yamamoto; Kenji Takeuchi
  7. Autocracies and Development in a Global Economy: A Tale of Two Elites By Anders Akerman; Anna Larsson; Alireza Naghavi
  8. How strong is the evidence for the existence of poverty traps? A multi country assessment By Andy McKay; Emilie Perge

  1. By: Nabil Aflouk (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII); Se-Eun Jeong (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII); Jacques Mazier (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII); Jamel Saadaoui (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII)
    Abstract: Since the mid-1990s, the world imbalances have increased significantly with a large US current deficit facing Asian surpluses, mainly Chinese. Since 2007, a partial reduction of these imbalances has been obtained, largely thanks to production's decreases, without large exchange rate adjustments. The Asian surpluses have remained important. The objective of this paper is to examine the exchange rate misalignments (ERM) of the main emerging countries in Asia and Latin America since the 1980s, so as to shed light on the 2000s by a long term analysis and compare with the industrialized countries' case. Our results confirm that ERM have been reduced since the mid-2000s at the world level, but the dollar remained overvalued against the East Asian countries, except the yen. Chinese, Indian and Brazilian exchange rate policies have been much contrasted since the 1980s. The Indian rupee has been more often overvalued while a more balance situation prevailed in Brazil only since the 2000s. The Latin American countries have faced wider and more dispersed ERM and current imbalances than East Asian countries. But Argentina, Chile and Uruguay benefits now of undervalued currencies while Mexico is closer to equilibrium.
    Keywords: Equilibrium Exchange Rate, Current Account Balance, Macroeconomic Balance, Emerging Countries
    Date: 2011
  2. By: D. Filiz Unsal; Carolina Osorio; Runchana Pongsaparn
    Abstract: We propose a new Financial Condition Index (FCI) for Asian economies based on two different methodologies: a VAR model and a Dynamic Factor Model. The paper shows that this index has predictive power in forecasting GDP growth and may be thus used as a leading indicator. Based on the FCI, financial conditions in Asia tightened substantially earlier in the global crisis, reflecting losses in the stock markets and tighter credit conditions. In early 2010, financial conditions in Asia recovered rapidly and reached precrisis levels, thanks to accommodative monetary policies and a rapid rebound in regional equity markets.
    Keywords: Asia , Economic growth , Economic conditions , Financial sector , Forecasting models , Global Financial Crisis 2008-2009 , Gross domestic product ,
    Date: 2011–07–18
  3. By: Osorio, Camilo Gomez; Abriningrum, Dwi Endah; Armas, Enrique Blanco; Firdaus, Muhammad
    Abstract: Using the Agricultural Census 2003 and the Rice Household Survey 2008 for Indonesia, this paper analyzes the distribution of benefits from fertilizer subsidies and their impact on rice production. The findings suggest that most farmers benefit from fertilizer subsidies; however, the 40 percent largest farmers capture up to 60 percent of the subsidy. The regressive nature of the fertilizer subsidies is in line with research carried out in other countries, the result of larger farms using a larger volume of fertilizer. This paper confirms that fertilizer used in adequate quantities has a positive and significant impact on rice yields, but it also provides evidence that over-using fertilizer has an adverse impact on yields (an inverted U-curve relationship).
    Keywords: Fertilizers,Crops&Crop Management Systems,Economic Theory&Research,Regional Economic Development,Rural Poverty Reduction
    Date: 2011–08–01
  4. By: Yamamura, Eiji; Andrés, Antonio
    Abstract: Using individual-level data from China, Korea, and Japan for 2006, this research examines how the age of children of the relationship influences marital satisfaction for males and females in East Asian countries. Our results show that the marital satisfaction of males is barely affected by a child of the relationship, whereas the marital satisfaction of females with a young child is lower than that of females who do not have a child. This result holds for countries of different development stages. There is also a gender differential regarding the effect of young children on marital satisfaction. Furthermore, the more developed the country, the greater this difference becomes.
    Keywords: Marital satisfaction; child; East Asian countries; probit
    JEL: J13 D19 J16
    Date: 2011–06–25
  5. By: Serhan Cevik; Joshua Charap
    Abstract: This paper examines the empirical behavior of conventional bank deposit rates and the rate of return on retail Islamic profit-and-loss sharing (PLS) investment accounts in Malaysia and Turkey, using monthly data from January 1997 to August 2010. The analysis shows that conventional bank deposit rates and PLS returns exhibit long-run cointegration and the time-varying volatility of conventional bank deposit rates and PLS returns is correlated and is statistically significant. The pairwise and multivariate causality tests show that conventional bank deposit rates Granger cause returns on PLS accounts. These findings have policy implications in terms of price stability and financial stability.
    Keywords: Banking , Cross country analysis , Interest rates , Islamic banking , Malaysia , Profit margins , Turkey ,
    Date: 2011–07–06
  6. By: Yuki Yamamoto (Graduate School of Economics, Kobe University); Kenji Takeuchi (Graduate School of Economics, Kobe University)
    Abstract: This paper estimates the break-even price in Central Kalimantan province, Indonesia and evaluates the effectiveness of a REDD+ mechanism in this area. On the basis of data collected through a field survey, we found that the break-even price is $17.14 per ton of carbon or $4.68 per ton of carbon dioxide. The figure can be even lower when we take the peat thickness of the area into account. Our analysis shows that the current level of carbon price can provide adequate compensation for Indonesian farmers.
    Date: 2011–08
  7. By: Anders Akerman; Anna Larsson; Alireza Naghavi
    Abstract: Data on the growth performances of countries with similar comparative (dis)advantage and political institutions reveal a striking variation across world regions. While some former autoc- racies such as the East Asian growth miracles have done remarkably well; others such as the Latin American economies have grown at much lower rates. In this paper; we propose a political economy explanation of these diverging paths of development by addressing the preferences of the country?s political elite. We build a theoretical framework where factors of production owned by the political elites di¤er across countries. In each country; the incumbent autocrat will cater to the preferences of the elites when setting trade policy and the property rights regime. We show how stronger property rights may lead to capital accumulation and labor reallocation to the manufacturing sector. This; in turn; can lead to a shift in the comparative advantage; a decision to open up to trade and an in?ow of more productive foreign capital. Consistent with a set of stylised facts on East Asia and Latin America; we argue that strong property rights are crucial for success upon globalization.
    Keywords: Autocracy; Growth; Political Elites; Landowners; Capitalists; Growth Miracles; Trade; Comparative Advantage; Capital Mobility; Property Rights
    JEL: F10 F20 P14 P16 O10 O24
    Date: 2011–06
  8. By: Andy McKay (Department of Economics, University of Sussex); Emilie Perge
    Abstract: In this paper, we focus on the role of assets in relation to chronic poverty. In particular, we consider the issue of whether it is not just low levels of assets which identify and explain chronic poverty, but also whether the asset accumulation process displays non-linearities and non-convexities that could explain why some households experience persistent poverty. We use parametric and nonparametric methods to test for evidence of the existence of an asset-based poverty trap mechanism across seven panel data sets, in five countries from Africa, Asia and Latin America, and in so doing add substantially to the existing evidence base on this issue.
    Keywords: poverty traps, assets, chronic poverty, parametric and non-parametric tests
    JEL: I32 O12
    Date: 2011–08

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