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on South East Asia |
| By: | C. Randall Henning (Peterson Institute for International Economics) |
| Abstract: | This paper examines the exchange rate regimes of East Asian countries since the initial shift by China to a controlled appreciation in July 2005, testing econometrically the weights of key currencies in the implicit baskets that appear to be targeted by East Asian monetary authorities. It finds, first, that four of the larger economies of Southeast Asia have formed a loose but effective "renminbi bloc" with China, with two other countries participating tentatively since the global financial crisis. Second, the emergence of the renminbi bloc in terms of the exchange rate has been facilitated by the continued dominance of the US dollar as a trade, investment and reserve currency. Third, exchange rate stabilization is explained by the economic strategies of these countries, which rely heavily on export development and financial repression, and the economic rise of China. Fourth, analysts should specify the exchange rate preferences of these emerging market countries carefully before drawing inferences about Chinese influence within the region. |
| Keywords: | exchange rates, exchange rate regimes, East Asia, Chinese exchange rate policy, renminbi bloc, East Asian regionalism, dollar standard, monetary power |
| JEL: | F31 F33 F36 F4 F5 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp12-15&r=sea |
| By: | Hiro Ito (Asian Development Bank Institute (ADBI)); Masahiro Kawai |
| Abstract: | We develop a new set of indexes of exchange rate stability, monetary policy independence, and financial market openness as the metrics for the trilemma hypothesis. In our exploration, we take a different and more nuanced approach than the previous indexes developed by Aizenman, Chinn, and Ito (2008). We show that the new indexes add up to the value two, supporting the trilemma hypothesis. We locate our sample economies’ policy mixes in the famous trilemma triangle—a useful and intuitive way to illustrate the state and evolution of policy mixes. We also examine if the persistent deviation of the sum of the three indexes from the value two indicates an unsustainable policy mix and therefore needs to be corrected by economic disruptions such as economic and financial crises. We obtain several findings. First, such a persistent deviation can occur particularly in emerging economies that later experience an inflation (or potentially a general or a currency) crisis, and dissipates in the postcrisis period. Second, there is no evidence for this type of association between deviations from the trilemma constraint and general, banking, or debt crises. Third, Thailand experienced such a deviation from the trilemma constraint in the period leading to the baht crisis of 1997, but not other East and Southeast Asian economies. This last result suggests that the main cause for the Thai baht crisis was an unsustainable policy mix in the precrisis period, while other affected economies experienced crises mainly due to contagion from Thailand. |
| Keywords: | exchange rate stability, monetary policy independence, financial market openness, the trilemma hypothesis, emerging economies, Southeast Asian, Thailand |
| JEL: | F15 F F31 F36 F41 O24 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:eab:financ:23331&r=sea |
| By: | Hiro Ito (Asian Development Bank Institute (ADBI)); Masahiro Kawai |
| Abstract: | We develop a new set of indexes of exchange rate stability, monetary policy independence, and financial market openness as the metrics for the trilemma hypothesis. In our exploration, we take a different and more nuanced approach than the previous indexes developed by Aizenman, Chinn, and Ito (2008). We show that the new indexes add up to the value two, supporting the trilemma hypothesis. We locate our sample economies’ policy mixes in the famous trilemma triangle—a useful and intuitive way to illustrate the state and evolution of policy mixes. We also examine if the persistent deviation of the sum of the three indexes from the value two indicates an unsustainable policy mix and therefore needs to be corrected by economic disruptions such as economic and financial crises. We obtain several findings. First, such a persistent deviation can occur particularly in emerging economies that later experience an inflation (or potentially a general or a currency) crisis, and dissipates in the postcrisis period. Second, there is no evidence for this type of association between deviations from the trilemma constraint and general, banking, or debt crises. Third, Thailand experienced such a deviation from the trilemma constraint in the period leading to the baht crisis of 1997, but not other East and Southeast Asian economies. This last result suggests that the main cause for the Thai baht crisis was an unsustainable policy mix in the precrisis period, while other affected economies experienced crises mainly due to contagion from Thailand. |
| Keywords: | exchange rate stability, monetary policy independence, financial market openness, the trilemma hypothesis, emerging economies, Southeast Asian, Thailand |
| JEL: | F15 F F31 F36 F41 O24 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:eab:macroe:23331&r=sea |
| By: | Ganeshan Wignaraja (Asian Development Bank Institute (ADBI)); Dorothea Ramizo; Luca Burmeister |
| Abstract: | Trade integration and free trade agreement (FTA)-led cooperation between Asia and Latin America has increased since the early 2000s. Using new criteria, this paper examines whether Asia-Latin America FTAs have facilitated market-led integration by liberalizing trade and behind the border regulatory barriers. Overall Asia-Latin America FTAs provide the foundations for inter-regional integration by liberalizing goods and services trade as well as some regulatory barriers. Future FTAs can support deeper integration by reducing residual regulatory barriers. Other policy priorities include forming a large inter-regional FTA, stimulating business use of FTAs and accelerating structural reforms. |
| Keywords: | Trade integration, Free Trade Agreement, Asia-Latin America FTAs, regulatory barriers, inter-regional integration, behind the border |
| JEL: | F15 O24 O53 O54 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:23332&r=sea |
| By: | William Latham (Department of Economics, University of Delaware, Newark, DE 19711, USA); Christian Le Bas (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France); Dmitry Volodin (HDR Inc., Silver Spring, MD, USA) |
| Abstract: | We provide new insights into the role of individual inventors in innovation. We focus our analysis on prolific inventors in China, Japan, Korea and Taiwan. We analyse patents issued by the U.S. Patent and Trademark Office to thousands of inventors from those countries between 1975 and 2010 to investigate the role that mobility plays in the behaviour of prolific inventors. We hypothesize that mobility affects: (1) the productivity of prolific inventors and, (2) the value of their inventions. We compare findings for each of the countries with those for inventors in North America, Western Europe and Australia & New Zealand. |
| Keywords: | Innovation, prolific inventor, inventor productivity and mobility, patent |
| JEL: | D22 J24 O15 O31 O32 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1227&r=sea |
| By: | Benkovskis, Konstantins (BOFIT); Wörz, Julia (BOFIT) |
| Abstract: | This analysis of global competitiveness of emerging market economies accounts for non-price aspects of competitiveness. Building on the methodology pioneered by Feenstra (1994) and Broda and Weinstein (2006), we construct an export price index that adjusts for changes in the set of competitors (variety) and changes in non-price factors (quality in a broad sense) for nine emerging economies (Argentina, Brazil, Chile, China, India, Indonesia, Mexico, Russia and Turkey). The highly disaggregated dataset covers the period 19992010 and is based on the standardized 6-digit Harmonized System (HS). Unlike studies that use a CPI-based real effective exchange rate, our method highlights notable differences in non-price competitiveness across markets. China shows a huge gain in international competitiveness due to non-price factors, suggesting that China critics may be overstressing the role of renminbi undervaluation in explaining China’s competitive position. Oil exports account for strong improvement in Russia’s non-price competitiveness, as well as the modest losses of competitiveness for Argentina and Indonesia. Brazil, Chile, India and Turkey show discernible improvements in their competitive position when accounting for non-price factors. Mexico’s competitiveness deteriorates regardless of the index chosen. |
| Keywords: | non-price competitiveness; quality; relative export price; emerging countries |
| JEL: | C43 F12 F14 L15 |
| Date: | 2012–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2012_019&r=sea |
| By: | David Shim (GIGA German Institute of Global and Area Studies); Patrick Flamm (GIGA German Institute of Global and Area Studies) |
| Abstract: | South Korea’s rising status in regional and global affairs has received much attention in recent years. But in academic, media and policy debates South Korea is usually regarded as a mere middle power that, due to its geopolitical situation, has only limited leeway in its foreign policy. Accordingly, it must constantly maneuver between its larger neighbors: China, Japan and Russia. However, this perspective neglects the fact that the same geopolitical constraint also applies to other states in the region. No country can easily project its power over others. We use the concept of “regional power” as a template to discuss South Korea’s rising stature in regional and global politics. We argue that Seoul seems quite capable of keeping up with other assumed regional powers. Hence, we not only provide a novel account of South Korea’s foreign policy options but also go beyond current approaches by asking about the (undetermined) possibilities for Seoul’s regional relations. |
| Keywords: | South Korea, security and foreign policy, middle power, regional power, regional order, East Asia |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:200&r=sea |
| By: | Chase, Claire; Do, Quy-Toan |
| Abstract: | Handwashing with soap, which has been shown to reduce diarrhea in young children by as much as 48 percent, is frequently mentioned as one of the most effective and inexpensive ways to save children's lives. Yet rates of handwashing remain very low throughout the world. Handwashing with soap campaigns are de rigueur in developing countries, but little is known about their effectiveness. Few have been rigorously evaluated, and none on a large-scale. This paper evaluates a large-scale handwashing campaign in three provinces of Vietnam in 2010. Exposure to the campaign resulted in a slight increase in the availability of handwashing materials in the household, and caregivers in the treatment group were more likely to report washing hands at some of the times emphasized by the campaign. However, observed handwashing with soap at these times is low, and there isn't any difference between the treatment and control groups. As a result, no impact on health or productivity is found. These results suggest that even under seemingly optimal conditions, where knowledge and access to soap and water are not main constraints, behavior change campaigns that take place on a large scale face tradeoffs in terms of intensity and effectiveness. |
| Keywords: | Health Monitoring&Evaluation,Hygiene Promotion and Social Marketing,Food&Beverage Industry,Disease Control&Prevention,Population Policies |
| Date: | 2012–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6207&r=sea |
| By: | Nguyen, Quang (Nanyang Technological University, Singapore); Villeval, Marie Claire (CNRS, GATE); Xu, Hui (CNRS, GATE) |
| Abstract: | We study the influence of risk and time preferences on trust and trustworthiness by conducting a field experiment in Vietnamese villages and by estimating the parameters of the Cumulative Prospect Theory and of quasi-hyperbolic time preferences. We find that while probability sensitivity or risk aversion do not affect trust, loss aversion influences trust indirectly by lowering the expectations of return. Also, more risk averse and less present biased participants are found to be trustworthier. The experience of receiving remittances influences behavior and a longer exposure to a collectivist economy tend to reduce trust and trustworthiness. |
| Keywords: | trust, trustworthiness, risk preferences, time preferences, Cumulative Prospect Theory, Vietnam, field experiment |
| JEL: | C91 C93 D81 D90 O10 O53 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6851&r=sea |
| By: | Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University); Pham-Khanh, Nam (Department of Economics, School of Business, Economics and Law, Göteborg University); Villegas-Palacio, Clara (Dept of Geosciences and Environment,) |
| Abstract: | Understanding the motivations behind people’s voluntary contributions to public goods is crucial for the broader issues of economic and social development. By using the experimental design of Fischbacher et al. (2001), we investigate the distribution of contribution types in two developing countries with very high collectivism rating – Colombia and Vietnam – and compare our findings with those previously found in developed countries. We also investigate the effect of introducing disclosure of contribution on the distribution of contribution types and on the contribution itself. Overall, our experiments show that the distribution of contribution types remains unaffected by the disclosure of contributions and, on average, is similar both in the two countries and when compared with previous findings with the exception of proportion of free-riders.<p> |
| Keywords: | Conditional cooperation; Disclosure; Experiment; Public Goods. |
| JEL: | C72 C92 H41 |
| Date: | 2012–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0541&r=sea |
| By: | Emran, M. Shahe (George Washington University); Maret-Rakotondrazaka, Fenohasina (George Washington University); Smith, Stephen C. (George Washington University) |
| Abstract: | Using household data from Vietnam, we provide evidence on the effects of education on freedom of spouse choice. We use war disruptions and spatial indicators of schooling supply as instruments. The point estimates indicate that a year of additional schooling reduces the probability of an arranged marriage by about 14 percentage points for an individual with eight years of schooling. We also estimate bounds on the effect of education on arranged marriage when exclusion restrictions are violated locally (the lower bound is six to seven percentage points). The impact of education is strong for women, but significantly weaker for men. |
| Keywords: | arranged marriage, education, schooling, freedom of choice, development, Vietnam, Red River delta, labour markets, social interactions |
| JEL: | I2 O12 D1 J12 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6862&r=sea |
| By: | Sabine Kurtenbach (GIGA German Institute of Global and Area Studies) |
| Abstract: | Postwar societies are high-risk contexts for youth violence. Nevertheless, not all postwar societies are equally violent. This article explores how these variations can be explained by focusing on the interaction between youths and adult society in a comparison of Guatemala and Cambodia. Starting from the concept of socialization and the possibilities of performing status passages to adulthood, it analyzes not only the different risk factors but also the agency of young people and society in trying to cope with and overcome obstacles on the pathway to adulthood. Different patterns of war termination and of reconstruction after war’s end are identified as major intervening variables that explain the variations in youth violence in as well as across the case studies. |
| Keywords: | violence, youth, status passages, Guatemala, Cambodia |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:199&r=sea |
| By: | Fischer, Justina AV |
| Abstract: | One solution to the euro crisis as a debt crisis can be found in stimulating economic growth. The Troika has proposed measures to deregulate labor markets in Southern EU countries: a longer working week, relaxation of job dismissal laws, raising the age of retirement. A longer working week for the same pay is the same as a de facto wage cut. A loosening of dismissal laws can be seen as an attempt to increase worker productivity against the threat of disciplinary action but may also increase the willingness of employers to take on new staff. Raising the age of retirement helps ease the labor cost burden on employers. Due to the structural differences in the economies of Southern Europe, a programme of deregulation based on lower wages only will not solve the euro crisis. Only in the case of Greece, Europe’s biggest 'problem child', would a general wage cut lead to improved competitiveness – regardless of the pain such a reform would cause. This is because Greece’s neighbours Turkey and Bulgaria, both offer the same products in the areas of tourism (“Sun, Sea and Sand”) and regional foodstuffs (olive oil, ewe’s milk cheese) but at a lower price. On the other hand, for Spain and Portugal efforts to stimulate innovation and increase productivity in the major industrial and agricultural businesses are recommended, while in Italy improving the quality in its luxury sector (wine, design, cultural tourism) would seem to make better sense than deregulating their lbor markets. It is also open to debate whether a foreign company would base its decision to locate to a particular European country solely on the existence of a flexible low wage sector. Europe has other factors in its favour such as high educational levels, a well-developed infrastructure, political and social stability as well as local cultural highlights and a high quality natural environment; labour-intensive industrial mass production is offered far cheaper in China and Vietnam. Of equal importance is the Troika’s insistence on combating nepotism and corruption. An economic policy that promotes productivity and quality will in the long run also prevent the creation of extreme disparities in income and thereby ensure social cohesion. |
| Keywords: | Euro; Eurocrisis; debt crisis; labor market; deregulation; EU; Greece; Italy; Spain; Portugal |
| JEL: | F15 F34 K31 F33 J83 H63 |
| Date: | 2012–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41543&r=sea |