nep-sea New Economics Papers
on South East Asia
Issue of 2013‒09‒06
ten papers chosen by
Kavita Iyengar
Asian Development Bank

  1. International labor migration in Vietnam and the impact of receiving countries' policies By Ishizuka, Futaba
  2. Economic class and labour market inclusion poor and middle class workers in developing Asia and the Pacific By Huynh, Phu; Kapsos, Steven
  3. The Central Bank and bank credits in the Philippines : a survey on effectiveness of monetary policy and its measures By Kashiwabara, Chie
  4. EU Biofuel Policies In Practise - A Carbon Map for Kalimantan and Sumatra By Mareike Lange
  5. Where does Philippine education go? : the "K to 12" program and reform of Philippine basic education By Okabe, Masayoshi
  6. Monetary Policy, Stock Prices and Central Banks - Cross-Country Comparisons of Cointegrated VAR Models By Ansgar Belke; Marcel Wiedmann
  7. Testing for Multiple Bubbles 1: Historical Episodes of Exuberance and Collapse in the S&P 500 By Peter C. B. Phillips; Shu-Ping Shi; Jun Yu
  8. Testing for Multiple Bubbles 2: Limit Theory of Real Time Detectors By Peter C. B. Phillips; Shu-Ping Shi; Jun Yu
  9. LM Tests of Spatial Dependence Based on Bootstrap Critical Values By Zhenlin Yang
  10. Investment Frictions and the Aggregate Output Loss in China By Guiying (Laura) Wu

  1. By: Ishizuka, Futaba
    Abstract: Labor export has been part of Vietnam’s socio-economic development strategy since the beginning of the doi moi era. Recent years, Vietnam has sent about 80,000 workers abroad per year. Vietnam has become a major source country of unskilled foreign workers for high-income East Asian countries. However, in these receiving countries, the desertion rate among Vietnamese workers is quite high, compared with that for workers from other countries. This paper examines the impact of Korean and Japanese policies for receiving foreign workers applied to and implemented in Vietnam, as well as the impact of Vietnamese labor sending system, on the problem of runaway workers.
    Keywords: Vietnam, Japan, South Korea, Taiwan, Malaysia, Migrant labor, Alien labor, Migration, International Labor Migration
    JEL: J61
    Date: 2013–03
  2. By: Huynh, Phu; Kapsos, Steven
    Abstract: Presents trends and estimates of the poor, near poor and middle class working population in developing Asia and the Pacific.
    Keywords: employment, unemployment, employment opportunity, labour force participation, age group, sex, social class, data collecting, methodology, trend, projection, Asia, Pacific, emploi, chômage, possibilités d'emploi, taux d'activité, groupe d'âge, sexe, classe sociale, collecte des données, méthodologie, tendance, projection, Asie, Pacifique, empleo, desempleo, oportunidades de empleo, tasa de actividad de mano de obra, grupo de edad, sexo, clase social, recopilación de datos, metodología, tendencia, proyección, Asia, Pacífico
    Date: 2013
  3. By: Kashiwabara, Chie
    Abstract: In the post-Asian crisis period, bank loans to the manufacturing sector have shown a slow recovery in the affected countries, unexceptionally in the Philippines. This paper provides a literacy survey on the effectiveness of the Central Bank’s monetary policy and the responsiveness of the financial market, and discusses on the future works necessary to better understand the monetary policy effectiveness in the Philippines. As the survey shows, most previous works focus on the correlation between the short-term policy rates and during the period of monetary tightening and relatively less interest in quantitative effectiveness. Future tasks would shed lights on (1) the asset side – other than loan outstanding – of banks to analyze their behavior/preference in structuring portfolios, and (2) the quantitative impacts during the monetary easing period.
    Keywords: Philippines, Monetary policy, Loans, Credit, Monetary policy measure, Credit channel, Bank loan
    JEL: E42 E52 G38
    Date: 2013–03
  4. By: Mareike Lange
    Abstract: It is still difficult for biofuel producers to proof the contribution of their biofuels to reducing carbon emissions because the production of biofuel feedstocks can cause land use change (LUC), which in turn causes carbon emissions. A carbon map can serve as a basis to proof such contribution. I show how to calculate a carbon map according to the sustainability requirements for biofuel production adopted by the European Commission (EU-RED) for Kalimantan and Sumatra in Indonesia. Based on the carbon map and the carbon balance of the production process I derive maps showing the possible emission savings that would be generated by biofuels based on palm if an area were to be converted to produce feedstock for this biodiesel options. I evaluate these maps according to the criterion contained in the EU-RED of 35% minimum emission savings for each biofuel option compared to its fossil alternative. In addition, to avoid indirect LUC effects of the EU-RED that might offset any contribution of biofuels to reducing carbon emissions, I argue that all agricultural production should be subject to sustainability assessments and that for an effective forest protection policies need to address the manifold drivers of deforestation in the country. In this effort, my resulting carbon maps can be the basis for a sustainable land use planning with a strategy to reactivate degraded areas that is binding for all agricultural production in the country
    Keywords: biofuels, carbon emissions, Renewable Energy directive, carbon map, land use change, Indonesia
    JEL: Q42 Q58 Q56 Q16
    Date: 2013–08
  5. By: Okabe, Masayoshi
    Abstract: In 2012 the Philippines launched its "K to 12" Program, a comprehensive reform of its basic education. Through this reform, the Philippines is catching up with global standards in secondary education and is attaching a high value to kindergarten. The structure, curricula, and philosophy of the education system are undergoing reform and improvement. The key points of the new policy are "preparation" for higher education, "eligibility" for entering domestic and overseas higher educational institutions, and immediate "employability" on graduating, all leading toward a "holistically developed Filipino". This policy appears admirable and timely, but it faces some pedagogical and socioeconomic problems. The author wants to point out in particular that the policy needs to address gender problems and should be combined with demand-side approaches in order to promote poverty alleviation and human development in the Philippines.
    Keywords: Philippines, Educational policy, Secondary education, Social development, Education reform, Human development, Poverty
    JEL: I21 I28 I31 O15
    Date: 2013–08
  6. By: Ansgar Belke; Marcel Wiedmann
    Abstract: In this paper, we analyze the long-run behavior and short-run dynamics of stock markets across some selected developed and emerging economies – namely the United States, the Euro Area, Japan, the United Kingdom, Australia, South Korea, Thailand and Brazil – in the Cointegrated Vector-Autoregressive (CVAR) framework. The main purpose is to assess empirically if liquidity conditions play a significant role for stock market developments. As an innovation, liquidity conditions enter the analysis from three angles: in the form of a broad monetary aggregate, the interbank overnight rate and net capital flows which in our case stands for the share of global liquidity that arrives in the recipient economy. A second aim is to check empirically whether central banks are able to serve as a driver of the stock market as it, for instance, seems to be the case in late 2012 and 2013 in the wake of the forward guidance conveyed by central banks worldwide.
    Keywords: Asset prices; CVAR; central banks; monetary policy; VECM
    JEL: E43 E58
    Date: 2013–08
  7. By: Peter C. B. Phillips (Yale University, University of Auckland, University of Southampton & Singapore Management University); Shu-Ping Shi (The Australian National University); Jun Yu (Singapore Management University)
    Abstract: Recent work on econometric detection mechanisms has shown the effectiveness of recursive procedures in identifying and dating financial bubbles. These procedures are useful as warning alerts in surveillance strategies conducted by central banks and fiscal regulators with real time data. Use of these methods over long historical periods presents a more serious econometric challenge due to the complexity of the nonlinear structure and break mechanisms that are inherent in multiple bubble phenomena within the same sample period. To meet this challenge the present paper develops a new recursive flexible window method that is better suited for practical implementation with long historical time series. The method is a generalized version of the sup ADF test of Phillips, Wu and Yu (2011, PWY) and delivers a consistent date-stamping strategy for the origination and termination of multiple bubbles. Simulations show that the test significantly improves discriminatory power and leads to distinct power gains when multiple bubbles occur. An empirical application of the methodology is conducted on S&P 500 stock market data over a long historical period from January 1871 to December 2010. The new approach successfully the well-known historical episodes of exuberance and collapse over this period, whereas the strategy of PWY and a related CUSUM dating procedure locate far fewer episodes in the same sample range.
    Keywords: Date-stamping strategy; Flexible window; Generalized sup ADF test; Multiple bubbles, Rational bubble; Periodically collapsing bubbles; Sup ADF test;
    JEL: C15 C22
    Date: 2013–08
  8. By: Peter C. B. Phillips (Yale University, University of Auckland, University of Southampton & Singapore Management University); Shu-Ping Shi (The Australian National University); Jun Yu (Singapore Management University)
    Abstract: This paper provides the limit theory of real time dating algorithms for bubble detection that were suggested in Phillips, Wu and Yu (2011, PWY) and Phillips, Shi and Yu (2013b, PSY). Bubbles are modeled using mildly explosive bubble episodes that are embedded within longer periods where the data evolves as a stochastic trend, thereby capturing normal market behavior as well as exuberance and collapse. Both the PWY and PSY estimates rely on recursive right tailed unit root tests (each with a different recursive algorithm) that may be used in real time to locate the origination and collapse dates of bubbles. Under certain explicit conditions, the moving window detector of PSY is shown to be a consistent dating algorithm even in the presence of multiple bubbles. The other algorithms are consistent detectors for bubbles early in the sample and, under stronger conditions, for subsequent bubbles in some cases. These asymptotic results and accompanying simulations guide the practical implementation of the procedures. They indicate that the PSY moving window detector is more reliable than the PWY strategy, sequential application of the PWY procedure and the CUSUM procedure.
    Keywords: Bubble duration, Consistency, Dating algorithm, Limit theory, Multiple bubbles, Real time detector.
    JEL: C15 C22
    Date: 2013–08
  9. By: Zhenlin Yang (School of Economics, Singapore Management University)
    Abstract: To test the existence of spatial dependence in an econometric model, a convenient test is the Lagrange Multiplier (LM) test. However, evidence shows that, infinite samples, the LM test referring to asymptotic critical values may suffer from the problems of size distortion and low power, which become worse with a denser spatial weight matrix. In this paper, residual-based bootstrap methods are introduced for asymptotically refined approximations to the finite sample critical values of the LM statistics. Conditions for their validity are clearly laid out and formal justifications are given in general, and in details under several popular spatial LM tests using Edgeworth expansions. Monte Carlo results show that when the conditions are not fully met, bootstrap may lead to unstable critical values that change significantly with the alternative, whereas when all conditions are met, bootstrap critical values are very stable, approximate much better the finite sample critical values than those based on asymptotics, and lead to significantly improved size and power. The methods are further demonstrated using more general spatial LM tests, in connection with local misspecification and unknown heteroskedasticity.
    Keywords: Asymptotic refinements; Bootstrap; Edgeworth expansion; LM Tests; Spatial dependence; Size; Power; Local misspecification; heteroskedasticity; Wild bootstrap.
    JEL: C12 C15 C18 C21
    Date: 2013–05
  10. By: Guiying (Laura) Wu (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore, 637332.)
    Abstract: Investment frictions reduce, delay or protract investment expenditure that is necessary for ?rms to capture growth opportunities. Using a capital adjust- ment costs framework, this paper estimates the gap between China?s actual and frictionless aggregate output. It applies the method of simulated moments to a fully structural investment model on a panel of Chinese ?rms; and takes into ac- count potential unobserved heterogeneities and measurement errors in the data. The estimated capital adjustment costs are substantial and vary across ?rms of di¤erent sizes, and across regions with di¤erent investment environments. If Chinese ?rms had faced a lower level of adjustment costs such as in the U.S., China?s aggregate output would be 25% higher.
    Keywords: Investment, Capital Adjustment Costs, Method of Simulated Moments
    JEL: E22 D92 C15
    Date: 2013–07

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