nep-sea New Economics Papers
on South East Asia
Issue of 2011‒08‒29
seven papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Diversity and Change: Asian American and Pacific Islander Workers By John Schmitt; Hye Jin Rho; Nicole Woo
  2. A structural modeling of exchange rate, prices and interest rates between Malaysia-China in the liberalization era By Chan, Tze-Haw
  3. Black-Scholes formulae for Asian options in local volatility models By Paolo Foschi; Stefano Pagliarani; Andrea Pascucci
  4. NAMAs in the Transport Sector: Case Studies from Brazil, Indonesia, Mexico and the People's Republic of China By Cornie Huizenga; Stefan Bakker
  5. How Do People in Asia and the Pacific Migrate Legally for Work? An Overview of Legal Frameworks: GATS Mode 4, PTAs and Bilateral Labour Agreements By Melanie Ramjoue
  6. Exchange rate misalignments: A comparison of China today against recent historical experiences of Japan, Germany, Singapore and Taiwan By ´He, Xinhua; Qin, Duo; Liu, Yimeng
  7. Group Violence, Ethnic Diversity, and Citizen Participation: Evidence from Indonesia By Christophe Muller; Marc Vothknecht

  1. By: John Schmitt; Hye Jin Rho; Nicole Woo
    Abstract: About 7.4 million Asian Americans and Pacific Islanders (AAPI) work in the United States, making up 5.3 percent of the total U.S. workforce. About 7.1 million of these AAPI workers are Asian Americans; about 300,000 are Pacific Islanders. The AAPI workforce is almost 20 times larger today than it was in 1960. Meanwhile, the share of AAPIs in the total workforce has increased about tenfold over the same period. Three broad themes emerge from our analysis of the data: The first is that AAPI workers are highly diverse. The second theme is that AAPI workers face many challenges in the labor market. The final theme is that the trends in the economic circumstances of AAPI workers have closely mirrored those of the broader workforce.
    Keywords: unions, wages, benefits, pension, health insurance, asian
    JEL: J J1 J3 J31 J32 J41 J5 J58 J6 J68 J88
    Date: 2011–07
  2. By: Chan, Tze-Haw
    Abstract: This study constructs a structural system that allows for possible interactions between the goods and capital markets for Malaysia vis-à-vis China in the liberalization era (1994: Jan to 2011: June). It encompasses the joint hypothesis of Purchasing Power (PPP) and Interest Rate Parity (IRP) conditions in the presence of I(1) exogenous variables. Advanced econometric procedures including the structural VARX, VECX*, over-identifying restrictions, bootstrapping, persistent profiles and generalized variance decomposition are utilized in the analyses. The finding upholds support for both PPP and IRP, when exchange rate regime and structural breaks of Asia crisis and subprime crisis are taken into accounts. Despite the direct imported inflation, exchange rate also plays a significant role in the price transmission mechanism. And, Malaysian maintains the relative monetary autonomy against China in short run, but the price channel will affect the extent of IRP condition. Lastly, the faster pace of adjustment towards price instead of interest rate equilibrium implies the nonappearance of sequencing problem in market integration. Putting together, our model contributes as an early warning system for Malaysia’s economic defense against global shocks.
    Keywords: International Parity Conditions; Market Integration; Price Transmission Mechanism; Structural VARX; Bootstrapping
    JEL: C51 F42 F36
    Date: 2011–08–01
  3. By: Paolo Foschi (Università di Bologna); Stefano Pagliarani (Università di Padova); Andrea Pascucci (Università di Bologna)
    Abstract: We develop approximate formulae expressed in terms of elementary functions for the density, the price and the Greeks of path dependent options of Asian style, in a general local volatility model. An algorithm for computing higher order approximations is provided. The proof is based on a heat kernel expansion method in the framework of hypoelliptic, not uniformly parabolic, partial differential equations.
    Keywords: Asian Options, Degenerate Diffusion Processes, Transition Density Functions, Analytic Approximations, Option Pricing
    Date: 2011
  4. By: Cornie Huizenga; Stefan Bakker
    Keywords: Infrastructure & Transport :: Railways, NAMA, Sustainable Transport, Bus Rapid Transit (BRT), Avoid-Shift-Improve, Transport Demand Management, Mobility, Greenhouse Gas Emissions, Latin America, BRIC, Climate Change Adaptation, Non-Motorized Transport, Urban Transport
    Date: 2010–10
  5. By: Melanie Ramjoue (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP))
    Abstract: This paper examines the patchwork of multilateral, regional and bilateral legal instruments through which migrants from Asia and the Pacific currently legally cross borders in search of employment. It concludes that the existing frameworks are very inadequate: in almost all the multilateral and preferential agreements focusing predominantly on trade (GATS Mode 4 and Preferential Trade Agreement), countries have made binding commitments only with respect to the temporary entry of high-skilled service providers.
    Keywords: International Migration, Trade in Services, GATS Mode 4, Preferential Trade Agreements, Bilateral Labour Agreements
    JEL: F1
    Date: 2011–06
  6. By: ´He, Xinhua (BOFIT); Qin, Duo (BOFIT); Liu, Yimeng (BOFIT)
    Abstract: The familiar claim of Chinese currency manipulation is generally asserted without reference to empirical evidence. To investigate the legitimacy of the claim, we ask if the undervalued misalignment found in the real effective exchange rate (REER) of the Chinese renminbi (RMB) over the past decade has any recent historical precedents. Four cases are examined: the Japanese yen, the Deutsche mark, the Singapore dollar and the Taiwan dollar. Panel-based misalignment estimates of the REER of the four currencies are obtained using quarterly data from the late 1970s to the early 2000s. Our estimates suggest that there are precedents to the recent misalignment of the RMB in terms of magnitude, duration or breadth of currency coverage, and that a net build-up in foreign asset does not necessarily result in currency misalignment. In addition to finding little empirical justification for the claim of Chinese currency manipulation, we note that REER misalignment runs a risk of propagating inflation in the home economy.
    Keywords: REER misalignment; RMB; yen; D-mark; Singapore dollar; Taiwan dollar
    JEL: C23 F31 F41 O57
    Date: 2011–08–22
  7. By: Christophe Muller; Marc Vothknecht
    Abstract: This paper addresses the impact of violent conflict on social capital, as measured by citizen participation in community groups defined for four activity types: governance, social service, infrastructure development and risk-sharing. Combining household panel data from Indonesia with conflict event information, we find an overall decrease in citizen contributions in districts affected by group violence in the early post-Suharto transition period. However, participation in communities with a high degree of ethnic polarization is less strongly affected and even stimulated for local governance and risk-sharing activities. Moreover, individual engagement appears to be dependent on the involvement of other members from the own ethnic group, which points to emphases on bonding social networks in the presence of violence. Finally, in conflict regions, the wealthier households are more likely to engage into cooperative and infrastructure improvement activities, while they are dropping from security groups. On the contrary, the poorest households get more involved in social service activities and less in infrastructure groups. Our results illustrate the danger of generalizations when dealing with violence impact on community activities. We found a large variety of responses depending on the considered activity and its expected economic or social function. We also found large observed and unobserved individual heterogeneities of the effect of violent conflict on activity participation. Once an appropriate nomenclature of activities is used and intensive controls for observed and unobserved heterogeneity are performed, we found that some activities can actually be stimulated by conflict situations. In this respect, the ethnic configuration of society seems to be central in understanding this type of social capital building.
    Date: 2011

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