nep-sea New Economics Papers
on South East Asia
Issue of 2014‒07‒13
27 papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Potential Growth in Emerging Asia By Rahul Anand; Kevin C. Cheng; Sidra Rehman; Longmei Zhang
  2. Malaysia: Selected Issues By International Monetary Fund. Asia and Pacific Dept
  3. Antinomias del capitalismo: Una reseña sobre El malestar en la globalización de Joseph Stiglitz By Estrada, Fernando
  4. Financial Monitoring in the New ASEAN-5 Countries By Lim, Se Hee; Reyes, Noel G.
  5. Asia’s Stock Markets: Are There Crouching Tigers and Hidden Dragons? By Fabian Lipinsky; Li Lian Ong
  6. Toward Competitive and Innovative ASEAN SMEs: Philippine SME Policy Index 2012 By Aldaba, Rafaelita M.; Aldaba, Fernando T.
  7. Growth Strategy with Social Capital and Physical Capital- Theory and Evidence: the Case of Vietnam. By Cuong Le Van; Anh-Ngoc Nguyen; Ngoc-Minh Nguyen
  8. Caminhos para o Investimento Privado nas Economias Emergentes: as Características Institucionais e os Spreads Corporativos By Katia Rocha; Ajax Moreira; Gabriel Fiuza; Marcelo Pessoa
  9. Why Was Asia Resilient? Lessons from the Past and for the Future By Phakawa Jeasakul; Cheng Hoon Lim; Erik J. Lundbäck
  10. Designing a Cooperation Framework for Philippine Competition and Regulatory Agencies By Aldaba, Rafaelita M.; Sy, Geronimo S.
  11. The Role of Sri Lanka in Enhancing Connectivity between South Asia and Southeast Asia By Weerakoon, Dushni; Perera, Nipuni
  12. The Philippine Manufacturing Industry Roadmap: Agenda for New Industrial Policy, High Productivity Jobs, and Inclusive Growth By Aldaba, Rafaelita M.
  13. Impacts of Regional Trade Agreements(RTAs) on Food Security: A Case of ASEAN Free Trade Agreement By H. M. S. P. Herath; Cao Liang; Chen Yongbing
  14. Oil price volatility and real effective exchange rate: the case of Thailand By Jiranyakul, Komain
  15. Leaning Against the Wind: Macroprudential Policy in Asia By Longmei Zhang; Edda Zoli
  16. Malaysia: Financial Sector Assessment Program Stress Testing the Malaysian and Labuan IBFC Banking Sectors-Technical Note By International Monetary Fund. Monetary and Capital Markets Department
  17. Study of Non-Notified Trade Agreements to the World Trade Organization: The Case of Asia and Pacific Region By Hamanaka, Shintaro
  18. Malaysia: Financial Sector Assessment Program Banking System Spillovers-Technical Note By International Monetary Fund. Monetary and Capital Markets Department
  19. Agricultural extension and technical efficiency of tea production in northeastern Vietnam. By Phu Nguyen-Van; Nguyen To-Thea
  20. Malaysia: Financial Sector Assessment Program Financial Sector Performance, Vulnerabilities and Derivatives-Technical Note By International Monetary Fund. Monetary and Capital Markets Department
  21. Malaysia: Financial Sector Assessment Program Housing Market-Technical Note By International Monetary Fund. Monetary and Capital Markets Department
  22. Malaysia: Financial Sector Assessment Program Monetary Liquidity Frameworks-Technical Note By International Monetary Fund. Monetary and Capital Markets Department
  23. Stature, Skills and Adult Life Outcomes: Evidence from Indonesia By Olivier Bargain; Jinan Zeidan
  24. Geometric Asian Option Pricing in General Affine Stochastic Volatility Models with Jumps By Friedrich Hubalek; Martin Keller-Ressel; Carlo Sgarra
  25. Myanmar: Second Review Under the Staff-Monitored Program-Staff Report and Press Release By International Monetary Fund. Asia and Pacific Dept
  26. Preferences over Leisure and Consumption of Siblings and Intra-Household Allocation By Martina Kirchberger
  27. Tracking Global Demand for Emerging Market Sovereign Debt By Serkan Arslanalp; Takahiro Tsuda

  1. By: Rahul Anand; Kevin C. Cheng; Sidra Rehman; Longmei Zhang
    Abstract: Using three distinct approaches—statistical filtering, production function, and multivariate model— this paper estimates potential growth for China, India, and five ASEAN countries (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) during 1993–2013. The main findings include: (i) both China and India have recently exhibited a slowdown in potential growth, largely reflecting a decline of total factor productivity (TFP) growth; (ii) by contrast, trend growth for the five ASEAN countries has been rather stable and might even have increased marginally, with the notable exception of Vietnam;(iii) over the longer term, demographic factors will be much more supportive in India and some ASEAN economies than in China, where working-age population should start shrinking, with the overall dependency ratio climbing by the end of this decade. Improving or sustaining potential growth calls for broad structural reforms.
    Keywords: Economic growth;China;India;Asia;Emerging markets;Productivity;Fiscal reforms;unemployment, growth rate, growth accounting, nairu, gdp growth, labor force, unemployment rate, labor force participation, growth rates, labor participation, labor force participation rate, rate of unemployment, business cycle, rate of growth, natural rate of unemployment, real gdp, business cycles, growth model, non-accelerating inflation rate of unemployment, gdp per capita, labor participation rate, gdp growth rate
    Date: 2014–01–13
  2. By: International Monetary Fund. Asia and Pacific Dept
    Keywords: Article IV consultation reports;Fiscal policy;Revenue mobilization;Tax revenues;Government expenditures;Subsidies;Public sector wages;Corporate sector;Bond markets;Selected issues;Malaysia;
    Date: 2014–03–18
  3. By: Estrada, Fernando
    Abstract: The core issue raised in Globalization and its Discontents, what is the critical evaluation of the IMF's role in the financial crisis in Asian countries and modern Russian transition. The Asian crisis began in July 1997 when the Thai devaluation came to their impact throughout Southeast Asia, as the region plunged into a social setback never seen before. Stiglitz maintains that the main cause of the devaluation of financial liberalization was recommended by Washington in previous years.
    Keywords: Globalization, Stiglitz, IMF, Economic, Asian, Markets
    JEL: H0 H11 H44 I14 I18 O19 O53
    Date: 2014
  4. By: Lim, Se Hee (Korea Center for International Finance); Reyes, Noel G. (Asian Development Bank)
    Abstract: This paper examines the issues surrounding the implementation of global regulatory reforms—spearheaded by the G20 and mainly under the aegis of the Financial Stability Board (FSB)—in Brunei Darussalam, Cambodia, the Lao People’s Democratic Republic (Lao PDR), Myanmar, and Viet Nam (BCLMV). These countries are the five newest members of the Association of Southeast Asian Nations (ASEAN). As such, there has been little consideration of the impact of global regulatory reforms on these countries. This paper contributes to the literature by providing an analysis of the capacity of the BCLMV countries to implement necessary financial regulatory reforms. Further, this analysis supplements ongoing efforts to establish the building blocks for the ASEAN Economic Community (AEC), which is scheduled to be implemented by 2015. Toward this end, the paper addresses six key development issues in the CLMV countries: (i) financial regulatory and supervisory systems, (ii) compliance with capital adequacy and liquidity management guidelines under the Basel reforms, (iii) macroprudential surveillance systems, (iv) transparency and disclosure, and (v) capital flow management.
    Keywords: financial regulatory systems; capital adequacy and liquidity management; Basel reforms; macroprudential surveillance; transparency and disclosure; capital flow; noncore liabilities; BCLMV and ASEAN-5 countries; ASEAN Economic Community
    JEL: G28 K22 O16
    Date: 2014–05–01
  5. By: Fabian Lipinsky; Li Lian Ong
    Abstract: Stock markets play a key role in corporate financing in Asia. However, despite their increasing importance in terms of size and cross-border investment activity, the region’s markets are reputed to be more “idiosyncratic†and less reliant on economic and corporate fundamentals in their pricing. Using a model that draws on international asset pricing and economic theory, as well as accounting literature, we find evidence of greater idiosyncratic influences in the pricing of Asia’s stock markets, compared to their G-7 counterparts, beyond the identified systematic factors and local fundamentals. We also show proof of a significant relationship between the strength of implementation of securities regulations and the “noise†in stock pricing, which suggests that improvements in the regulation of securities markets in Asia could enhance the role of stock markets as stable and reliable sources of financing into the future.
    Keywords: Stock markets;Asia;Stock prices;Foreign investment;Securities regulations;Pricing policy;Developed countries;Emerging markets;Cross country analysis;Economic models;arbitrage pricing theory, Asian financial crisis, fundamentals, global financial crisis, idiosyncratic factors, integration, IOSCO, securities regulation, stock market, stock pricing, term structure of interest rates.
    Date: 2014–02–26
  6. By: Aldaba, Rafaelita M.; Aldaba, Fernando T.
    Abstract: The ASEAN SME Policy Index is an analytical tool to review, track, and identify gaps in small and medium enterprise (SME) policy development and implementation. The index covers the following eight policy areas: institutional framework; cheaper and faster start-up and better legislation and regulation for SMEs; access to information and supporting services; access to finance; technology and technology transfer; market access and getting more output of the single market; promotion of entrepreneurial education; and developing stronger, more effective representation for SMEs` interests. Applying the above framework, the paper assesses whether the policies, programs, and institutions in the Philippines are supportive of the development of SMEs in the region. On the average, the overall score for the country is quite modest and to move forward, it is important to simplify and streamline the overall registration process. Existing government programs must be evaluated in terms of scope and delivery with a view to improve and broaden support services for start-ups to include business incubators as well as vouchers, grants and loans on favorable terms especially for the most dynamic enterprises. There is also a need to institutionalize the framework for conducting regulatory impact assessment in the country.
    Keywords: Philippines, ASEAN SME Policy Index
    Date: 2014
  7. By: Cuong Le Van (Centre d'Economie de la Sorbonne - Paris School of Economics, IPAG and VCREME); Anh-Ngoc Nguyen (Development and Policies Research Center (DEPOCEN) - Vietnam); Ngoc-Minh Nguyen (Development and Policies Research Center (DEPOCEN) - Vietnam)
    Abstract: We study the impact of social capital in both simple theoretical and empirical model with the main assumption is the price of physical capital is a decreasing function of social capital. In our theoretical model, there exists a critical value such that firm will not invest in social capital if its saving is lower than the critical value and otherwise. Moreover, the output depends positively and non-linearly on the social capital. Our empirical model that captures the impact of physical capital, human capital, and social capital using the database from Survey of Small and Medium Scale Manufacturing Enterprises (SMEs) in Vietnam 2011, confirms the conclusions of the theoretical model.
    Keywords: Social Capital, Optimal Growth.
    JEL: Z1 E2 O00
    Date: 2014–02
  8. By: Katia Rocha; Ajax Moreira; Gabriel Fiuza; Marcelo Pessoa
    Abstract: O estudo analisa o papel das características institucionais do país (governança) e do sistema financeiro doméstico (desenvolvimento, eficiência, estabilidade e abertura de capital) nos determinantes dos spreads de títulos corporativos emergentes emitidos no mercado internacional. Propõe-se um modelo econométrico de dados em painel com os spreads corporativos do Corporate Emerging Markets Bond Index Broad Diversified (Cembi Broad Diversified) no período de 2002 a 2011 para vinte economias emergentes. Os spreads soberanos analisados de África do Sul, Argentina, Brasil, Cazaquistão, Chile, China, Colômbia, Coreia do Sul, Filipinas, Índia, Indonésia, Malásia, México, Peru, Rússia, Singapura, Tailândia, Turquia, Ucrânia e Venezuela, constituíam em junho de 2013 aproximadamente 80% do Cembi Broad Diversified. Conclui-se que políticas que promovam liberalização financeira, abertura de capital, austeridade fiscal, desenvolvimento do sistema financeiro doméstico e melhorias em elementos institucionais do governo, como aparato legal e qualidade da regulação, têm potencial de reduzir os spreads corporativos dos mercados emergentes, em especial em momentos de aversão ao risco global. Os resultados indicam que iniciativas visando ao aprimoramento institucional do governo e ao desenvolvimento do mercado de capitais podem baratear as captações de empresas emergentes e, consequentemente, aumentar a participação do investimento privado. The study analyses the role of institutional characteristics of a country (governance) and the domestic financial system (depth, efficiency, stability, and capital openness) in determinants of emerging market corporate bond spreads issued in international market. We propose an econometric panel data with corporate bond spreads of CEMBI Broad Diversified Index in the period of 2002–2011 to twenty emerging economies. The sovereigns analyzed: Argentina, Brazil, Chile, China, Colombia, India, Indonesia, Kazakhstan, South Korea, Malaysia, Mexico, Peru, Philippines, Russia, Singapore, South Africa, Thailand, Turkey, Ukraine and Venezuela corresponded to roughly 80% of CEMBI Broad Diversified Index in July 2013. We conclude that policies that promote financial liberalization, capital openness, fiscal austerity, development of domestic financial system and improve governance institutional characteristics as rule of law and regulatory quality have the potential to reduce emerging market corporate bond spreads, especially in moments of global risk aversion. Results indicate that initiatives looking forward the improvement of institutional government apparatus and capital market development may help emerging market companies to increase the share of private capital investment.
    Date: 2014–06
  9. By: Phakawa Jeasakul; Cheng Hoon Lim; Erik J. Lundbäck
    Abstract: Asia proved to be remarkably resilient in the face of the global financial crisis, but why was its output performance stronger than that of other regions? The paper shows that better initial conditions—in the form of lower external and financial vulnerabilities—contributed significantly to Asia’s resilience. Key pre-crisis factors included moderate credit expansion, reliance on deposit funding, enhanced bank asset quality, reduced external financing, and improved current accounts. These improvements reflected the lessons from the Asian financial crisis in the late 1990s, which helped reshape both public policies and private sector behavior. For example, several countries stepped up their use of macroprudential policies, well before they were recognized as an essential component of the financial stability toolkit. They also overhauled financial regulations and strengthened oversight of financial institutions, which helped reduce risk-taking by households and firms before the global financial crisis. Looking ahead, Asia is in the process of adjusting to more volatile external conditions and higher risk premiums. By drawing the right lessons from its pre-crisis experiences, Asia’s economies will be better equipped to address new risks associated with increased cross-border capital flows and greater integration with the rest of the world.
    Keywords: Economic growth;Asia;Global Financial Crisis 2008-2009;Credit expansion;Debt reduction;Macroprudential Policy;Monetary policy;Fiscal policy;Financial systems;Financial crisis;Global financial crisis, resilience, financial and external vulnerabilities
    Date: 2014–02–26
  10. By: Aldaba, Rafaelita M.; Sy, Geronimo S.
    Abstract: As the Philippines move toward the legislation of its comprehensive competition law, one important issue that has emerged is the interaction between the competition agency and sector regulators. Based on a review of different approaches that different countries have adopted, the paper develops a framework for the interplay between regulatory agencies and competition authority in the Philippines. Taking into account the country`s stages of institutional development and market and policy reforms, the paper proposes an approach that would leave competition enforcement exclusively in the hands of the competition authority while technical and economic regulation would be performed by the sector regulator. At the same time, the sector regulator may be given competition law enforcement functions to be performed in coordination with the competition authority. The proposed approach would be based on a cooperation mechanism with sector regulators taking the leading role in economic and technical issues while the competition authority will be the lead in competition issues like abuse of dominance, anticompetitive agreements, cartels and merger review. It is important that the two coordinate and consult with each other to ensure that the policies or remedial measures taken by one would not be against the mandate of the other. The competition functions of the authority such as assuring nondiscriminatory access to essential networks and controlling other forms of anticompetitive conduct and merger review may be shared with sector regulators.
    Keywords: Philippines, regulation, competition law and policy
    Date: 2014
  11. By: Weerakoon, Dushni (Asian Development Bank Institute); Perera, Nipuni (Asian Development Bank Institute)
    Abstract: Improving physical connectivity between South and Southeast Asia has long been recognized as a key element in promoting greater trade and investment linkages within the region. As an island economy, Sri Lanka's regional connectivity has been mainly through its main sea port in Colombo, a transshipment hub port for South Asia. Investments to expand capacity at Colombo port are underway as part of Sri Lanka's renewed efforts to develop its infrastructure following the long internal separatist conflict that ended in 2009. Despite significant improvements in physical infrastructure connectivity, Sri Lanka has made only limited headway in strengthening its trade and investment links with the rest of the region. Moreover, the country has seen a sharp decline in its overall exports-to-gross domestic product (GDP) ratio, which is worrying in view of the growing external debt financing of many large infrastructure projects through state-led investment initiatives. Thus, Sri Lanka needs to focus on two priority areas: engaging private investment in infrastructure by strengthening the country's institutional and regulatory environment; and implementing a more strategic trade policy geared to enhance regional integration efforts.
    Keywords: connecting south asia and southeast; sri lankan economy; infrastructure; energy trade; regional trade flows; trade and transport administration
    JEL: F15
    Date: 2014–07–04
  12. By: Aldaba, Rafaelita M.
    Abstract: In the light of the weak performance of the Philippine manufacturing industry and the absence of structural transformation of the economy from agriculture to manufacturing in the last two decades, the paper calls for the implementation of a new industrial policy. This is crucial not only to upgrade Philippine industries, generate more and better jobs, and reduce poverty but also to take advantage of the market opportunities and face the challenges arising from the ASEAN Economic Community. Based on the sectoral roadmaps submitted by industries to the Department of Trade and Industry and Board of Investments, the paper has formulated a comprehensive industrial strategy to enable manufacturing firms to upgrade, thrive, and become catalysts and engines for sustained and inclusive growth. The long-term vision of the Manufacturing Industry Roadmap is to develop a globally competitive manufacturing industry supported by strong backward and forward linkages with both domestic and global supply chains. Through the implementation of the roadmap, manufacturing contribution to the economy would account for 30 percent of total value added and generate 15 percent of total employment. Industry policies will focus on horizontal and vertical measures and a coordination mechanism to enhance firm productivity, strengthen supply chains to enable firms to move up the technology scale, link domestic firms with multinational companies, and aggressively court more investment. Horizontal measures will cover human resource development, small and medium enterprises development, technology upgrading and innovation, investment promotion, and a competitive exchange rate policy. It will also address issues such as high power and logistics cost, smuggling, and infrastructure weaknesses. Vertical measures will address gaps in industry supply chains and expand the domestic market base as springboard for exports. A coordination mechanism will be designed to allow more interaction between government agencies and industries in identifying obstacles and determining the most appropriate interventions. The roadmap implementation will be private-sector led while the government acts as facilitator. As facilitating government, it will encourage producers to take risks, correct market and government failures, and address changes in policies and institutions. By creating the proper environment and strengthening industries, the government can promote the success of domestic firms in both the local and international markets that will lead to economic transformation. Only with the right environment can manufacturing unleash its full potentials to take advantage of the market opportunities currently facing us and become an engine for sustained and inclusive growth.
    Keywords: Philippines, structural transformation, manufacturing industry
    Date: 2014
  13. By: H. M. S. P. Herath; Cao Liang; Chen Yongbing
    Abstract: Discriminatory trade liberalization policies are becoming more popular among world economies. Countries are motivated to enter for regional trade agreements to capture faster economic growth for alleviating poverty. In developing economies like most of the member countries of the Association of South East Asian Nations (ASEAN), a sizeable portion of people are suffering from poverty by exposing them to food insecurity. Low level of income and low productivity of agricultural sector have augmented the severity of food insecurity of those people. Discriminatory trade liberalization policies are expected to reduce poverty and strengthen the food security. The objective of this paper is to examine the effect of ASEAN Free Trade Agreement (AFTA) on food security of its member countries. The multiple regression analysis in panel data was employed to disentangle the impacts of trade liberalization on food securit y with use of regional trade agreement dummy variable. The finding of the study supports that AFTA has influenced positively on food security of its member nations. After the formation of AFTA, the level of per-capita daily dietary energy supply of the member countries has been increased moderately over time.
    Date: 2014–07
  14. By: Jiranyakul, Komain
    Abstract: The main objective of this study is to directly examine the relation between real oil price and real effective exchange rate in Thailand during July 1997 to December 2013. Under the floating exchange rate regime, bilateral exchange rates are expected to fluctuate more than under the fixed exchange rate regime. The monthly data of real effective exchange rate index and real oil price are used. The results from this study reveal that there is no cointegration and causality in levels of the two series. However, an increase in oil price volatility causes real exchange rate volatility to increase. This main finding gives some policy implications to policy makers.
    Keywords: Oil price, real exchange rate, bivariate GARCH, volatility spillover.
    JEL: C22 G15 Q43
    Date: 2014–07
  15. By: Longmei Zhang; Edda Zoli
    Abstract: In recent years, macroprudential policy has become an increasingly active policy area. Many countries have adopted it as a tool to safeguard financial stability, in particular to deal with the credit and asset price cycles driven by global capital flows. This paper reviews the use of key macroprudential instruments and capital flow measures in 13 Asian economies and 33 economies in other regions since 2000, and constructs various macroprudential policy indices, aggregating sub-indices on key instruments. Asian economies appear to have made greater use of macroprudential tools, especially housing-related measures, than their counterparts in other regions. The effects of macroprudential policy are then assessed through an event study, cross-country macro panel regressions and bank-level micro panel regressions. The analysis suggests that macroprudential policy and capital flow measures have helped curb housing price growth, equity flows, credit growth, and bank leverage. The instruments that have been particularly effective in this regard include loan-to-value ratio caps, housing tax measures, and foreign currency-related measures.
    Keywords: Macroprudential Policy;Asia;Capital flows;Credit expansion;Asset prices;Inflation;Business cycles;Monetary policy;macroprudential policy; capital flow measures; credit growth; housing price
    Date: 2014–02–06
  16. By: International Monetary Fund. Monetary and Capital Markets Department
    Keywords: Financial Sector Assessment Program;Stress testing;Banking sector;Bank supervision;Malaysia;
    Date: 2014–04–15
  17. By: Hamanaka, Shintaro (Asian Development Bank)
    Abstract: “Cast light and evil will go away.” This is the basic idea of the transparency exercise of regional trade agreements (RTAs) at the World Trade Organization (WTO). Information sharing on RTAs is critically important because monitoring is impossible without it. In order for us to see not only good but also evil RTAs, a light called “notification requirement” should reach them. In reality, however, it is too optimistic to assume that the light reaches all RTAs. There seem to be many ghosts living in the dark; no information on ghosts can be shared and none can confirm if they are really ghosts. This paper attempts to reveal those RTAs upon which the WTO fails to shed the light of the transparency exercise. While many studies have pointed out that there are many non-notified RTAs as a reservation in conducting analysis of RTAs, this is the first scholarly attempt to identify the comprehensive picture of non-notified RTAs, with an emphasis on the Asia and the Pacific. Because information on all RTAs notified to the WTO is included in the WTO RTA Database, gathering information on non-notified trade agreements is the key to understanding the universe of trade agreements.
    Keywords: non-notified RTAs; transparency; Committee on Regional Trade Agreements(CRTA); notification; World Trade Organization (WTO); systemic issues
    JEL: F15 F53
    Date: 2014–05–01
  18. By: International Monetary Fund. Monetary and Capital Markets Department
    Keywords: Financial Sector Assessment Program;Banking sector;International banks;Spillovers;Risk management;Malaysia;
    Date: 2014–04–17
  19. By: Phu Nguyen-Van; Nguyen To-Thea
    Abstract: This study uses the stochastic production frontier to analyze technical efficiency of tea production in northeastern Vietnam. Our study estimated that the average technical efficiency of tea production is very low, only about 32%. Technical efficiency can be improved by having a training on sale skills whereas it can be negatively a?ected by access to information on tea market. The results indicated that there are a big potential for improving technical efficiency in tea production by using the available inputs and technology. For the purpose of improving efficiency, efforts should be made on agricultural extension (keeping the current form of training on sale skills, modifying the provision of information on tea market). Producers are also recommended to be more careful on the adoption of tea variety for their cultivation.
    Keywords: Agriculture extension, technical efficiency, stochastic frontier, translog, tea production.
    JEL: C21 D24 Q12 Q18
    Date: 2014
  20. By: International Monetary Fund. Monetary and Capital Markets Department
    Keywords: Financial Sector Assessment Program;Banking sector;Capital;Liquidity;Currency swaps;Nonbank financial sector;Capital markets;Malaysia;
    Date: 2014–04–15
  21. By: International Monetary Fund. Monetary and Capital Markets Department
    Keywords: Financial Sector Assessment Program;Housing;Housing prices;Malaysia;
    Date: 2014–04–15
  22. By: International Monetary Fund. Monetary and Capital Markets Department
    Keywords: Financial Sector Assessment Program;Monetary policy;Liquidity;Capital flows;Market interest rates;Malaysia;
    Date: 2014–04–15
  23. By: Olivier Bargain (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS); Jinan Zeidan (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS)
    Abstract: We investigate the effect of height on earnings, occupational choices and a subjective measure of well-being among Indonesian men. We explore the extent to which height captures the effects of human capital endowments set before entry on the labor market. Cognitive skills, co-determined with stature early in life, do not explain much of the height earnings premium directly. Yet, human capital more broadly, including cognition, educational attainment and other factors related to parental investments and background characteristics, explains around half of the height premium and does so through occupational sorting. Indeed, taller workers tend to have more education, and educated workers tend to work in more lucrative occupations that require brain and social skills, not brawn. The unexplained share of the height earnings premium reflects other labor market advantages of taller workers, including psycho-social dimensions. We also find a height premium in happiness, half of which simply accounts for the educational and earnings advantages of taller workers.
    Keywords: height, cognitive skills, physical skills, childhood conditions, earnings, occupation, happiness
    Date: 2014–07–07
  24. By: Friedrich Hubalek; Martin Keller-Ressel; Carlo Sgarra
    Abstract: In this paper we present some results on Geometric Asian option valuation for affine stochastic volatility models with jumps. We shall provide a general framework into which several different valuation problems based on some average process can be cast, and we shall obtain close-form solutions for some relevant affine model classes.
    Date: 2014–07
  25. By: International Monetary Fund. Asia and Pacific Dept
    Abstract: EXECUTIVE SUMMARY Context: The authorities are pursuing a wide-ranging economic reform program against a background of political liberalization. Challenges are formidable, however, as the authorities’ capacity to design and implement far-reaching reforms and absorb international assistance is being stretched. Macroeconomic situation and outlook: Growth has strengthened, led by services. However, international reserves remain low, and inflation pressures are significant. Notwithstanding these risks, the overall economic outlook is favorable. In 2013/14 and 2014/15, growth is projected to accelerate slightly, and inflation to remain elevated. The current account deficit is set to widen, but, from 2014/15 onward, be comfortably financed by FDI-related inflows and aid. Staff-monitored program: The SMP has been successful, with macroeconomic stability preserved and all quantitative and structural benchmarks met. Progress in building the institutions for economic management has also been made, though much remains to be done. IMF relations: The IMF’s engagement after the expiration of the SMP will remain intensive. Staff will continue to provide close support in updating the macroeconomic framework and formulating policy goals, and stand ready to discuss options for a more formalized cooperation. IMF capacity building will further intensify. Macroeconomic policies and further reforms: The Central Bank of Myanmar needs to focus on building international reserves and monetary policy tools, which will likely be needed in 2014/15 to sterilize significant foreign exchange inflows. Fiscal policy needs to continue balancing stability with development, while administrative reforms to boost revenue and public financial management need to be driven forward. Financial sector liberalization should proceed cautiously and in line with the development of supervisory capacity. Recently established policy banks should be supervised closely and managed transparently to minimize risks.
    Keywords: Staff-monitored programs;Fiscal policy;Fiscal reforms;Monetary policy;Reserves;Economic indicators;Letters of Intent;Debt sustainability analysis;Staff Reports;Press releases;Myanmar;
    Date: 2014–03–28
  26. By: Martina Kirchberger
    Abstract: Children are increasingly treated as active members in the household.� However, their preferences over consumption and leisure are rarely modelled.� This paper considers heterogeneity in siblings' preferences over leisure and consumption and builds a theoretical and empirical model for children's time and consumption allocations in a household.� We test the predictions of the model with unique data from Ethiopia, India, Peru and Vietnam which contain detailed information on time use and allocations of assignable goods for sibling pairs.� We find that conditioning on observable variables, the residuals of these simultaneous decisions are significantly negatively correlated.� This suggests that differences in siblings' relative time and consumption allocations are driven by their relative preferences over leisure and consumption rather than differences in parents' relative altruism.� Families seem to function as market economies in which children trade off leisure and consumption, select their optimal bundle, and are rewarded by their parents accordingly.
    Keywords: Intra-household allocation, children
    JEL: D1 J1 J2
    Date: 2014–07–02
  27. By: Serkan Arslanalp; Takahiro Tsuda
    Abstract: This paper proposes an approach to track US$1 trillion of emerging market government debt held by foreign investors in local and hard currency, based on a similar approach that was used for advanced economies (Arslanalp and Tsuda, 2012). The estimates are constructed on a quarterly basis from 2004 to mid-2013 and are available along with the paper in an online dataset. We estimate that about half a trillion dollars of foreign flows went into emerging market government debt during 2010–12, mostly coming from foreign asset managers. Foreign central bank holdings have risen as well, but remain concentrated in a few countries: Brazil, China, Indonesia, Poland, Malaysia, Mexico, and South Africa. We also find that foreign investor flows to emerging markets were less differentiated during 2010–12 against the background of near-zero interest rates in advanced economies. The paper extends some of the indicators proposed in our earlier paper to show how the investor base data can be used to assess countries’ sensitivity to external funding shocks and to track foreign investors’ exposures to different markets within a global benchmark portfolio.
    Keywords: Sovereign debt;Emerging markets;Demand;Foreign investment;Bond markets;Finance, Financial Crises, Portfolio Choice and Investment Decisions
    Date: 2014–03–05

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