nep-sea New Economics Papers
on South East Asia
Issue of 2019‒03‒11
eight papers chosen by
Kavita Iyengar
Asian Development Bank

  1. The Role of Electricity Prices in Structural Transformation: Evidence from the Philippines By Majah-Leah V. Ravago; Arlan Zandro I. Brucal; James Roumasset; Jan Carlo Punongbayan
  2. The Weak Rupiah: Catching the tailwinds and avoiding the shoals By Willem THORBECKE
  3. Using local expert knowledge to measure prices: Evidence from a survey experiment in Vietnam By Gibson, John; Le, Trinh
  4. Worlding aspirations and resilient futures: framings of risk and contemporary city-making in Metro Cebu, the Philippines By Ramalho, Jordana
  5. Modeling and forecasting inflation in Philippines using ARIMA models By NYONI, THABANI
  6. Exposure to floods, climate change, and poverty in Vietnam By Bangalore, Mook; Smith, Andrew; Veldkamp, Ted
  7. Understanding inflation patterns in Thailand: An ARMA approach By NYONI, THABANI
  8. Research frontiers of new institutional economics By Claude Ménard

  1. By: Majah-Leah V. Ravago (Ateneo de Manila University); Arlan Zandro I. Brucal (Grantham Research Institute on Climate Change and the Environment, The London School of Economics and Political Science); James Roumasset (University of Hawaii); Jan Carlo Punongbayan (University of the Philippines,Diliman)
    Abstract: The Philippines provides an extreme example of Rodrik’s observation that late developing countries experience deindustrialization at lower levels of per capita income than more advanced economies. Previous studies point to the role of protectionist policies, financial crises, and currency overvaluation as explanations for the shrinking share of the industry sector. We complement this literature by examining the role of electricity prices in the trajectory of industry share. We make use of data at the country level for 33 countries over the period 1980-2014 and at the Philippine regional level for 16 regions over the period 1990-2014. We find that higher electricity prices tend to amplify deindustrialization, causing industry share to turn downward at a lower peak and a lower per capita income, and to decline more steeply than otherwise. In a two-country comparison, we find that power intensive manufacturing subsectors have expanded more rapidly in Indonesia, where electricity prices have been low, whereas Philippine manufacturing has shifted toward less power-intensive and more labor-intensive subsectors in the face of high prices.
    Keywords: electricity prices, structural transformation, deindustrialization
    JEL: O10 O14 Q40 Q41
    Date: 2019–02
  2. By: Willem THORBECKE
    Abstract: The Indonesian rupiah depreciated 50 percent between July 2011 and January 2019. Blanchard et al . (2015) showed that capital outflows from emerging markets can reduce output by increasing the cost of financial intermediation and can increase output by increasing net exports. Regression results indicate that Indonesian banks are exposed to depreciations, but that exports are not stimulated by depreciations. The findings also indicate that Indonesia's export price index is positively correlated with commodity prices and negatively correlated with manufactured goods prices. Exporting more manufactured goods would reduce Indonesia's exposure to volatile commodity prices and allow depreciations to stimulate exports. This paper considers several steps that Indonesia could take to increase its manufacturing exports.
    Date: 2019–02
  3. By: Gibson, John; Le, Trinh
    Abstract: Many countries lack spatially disaggregated consumer price data. Yet these data are needed to estimate real inequality and spatial patterns of poverty, especially for poor countries where weak infrastructure and high transport costs create big price variation over space. We experimented in Vietnam with a new way of obtaining disaggregated price data, using local expert knowledge to derive the mean and variance for prices of 64 consumer items in over 1000 communities. We used photographs of the specified items to ensure comparability of the reported prices. These prices are used to calculate regional cost-of-living indexes, which provide a good approximation to benchmark multilateral price indexes that are calculated from data obtained from traditional market price surveys. In comparison, two widely used no-price methods, based on using food Engel curves to derive deflators and based on using unit values (survey group expenditures over group quantity) are very poor proxy indicators of prices and of the cost-of-living and would distort estimates of real inequality and the spatial pattern of poverty. Prices from local expert informants also exhibit a basic spatial feature of prices – the Alchian-Allen effect or ‘shipping the good apples out’ – in much the same way as do prices from the traditional survey approach. This effect is one reason why unit values are a bad proxy for prices and this effect should become more important as food systems commercialize. Using expert knowledge to measure local prices is a low-cost and feasible approach that could be adopted more widely in developing countries.
    Keywords: Expert knowledge; Inequality; Prices; Regional Cost-of-Living; Surveys; Vietnam
    JEL: D12 O15
    Date: 2019–02–28
  4. By: Ramalho, Jordana
    Abstract: In the Philippines, calls for creating ‘global’, ‘sustainable’ and ‘resilient’ cities are placing urban poor communities in increasingly precarious positions. These communities have long been the targets of urban development and ‘modernisation’ efforts; more recently the erasure of informal settlements from Philippine cities is being bolstered at the behest of climate change adaptation and disaster risk management (DRM) agendas. In Metro Cebu, flood management has been at the heart of DRM and broader urban development discussions, and is serving as justification for the demolition and displacement of informal settler communities in areas classed as ‘danger zones’. Using Kusno's (2010) interpretation of the ‘exemplary centre’ as a point of departure, this paper interrogates the relationship between DRM, worlding aspirations (Roy and Ong, 2011) and market-oriented urbanisation in Cebu, and considers the socio-spatial implications of these intersecting processes for urban poor communities. Through analysing the contradictions inherent in framings of certain bodies and spaces as being ‘of risk’ or ‘at risk’ over others, I argue that the epistemologies of modernity, disaster risk and resilience endorsed and propagated by the state are facilitating processes of displacement and dispossession that serve elite commercial interests under the auspices of disaster resilience and pro-poor development.
    Keywords: disaster risk reduction and management; Philippines; urban development; resilience; urban slums; worlding; ES/J500070/1
    JEL: Q15
    Date: 2019–02–26
    Abstract: This research uses annual time series data on inflation rates in the Philippines from 1960 to 2017, to model and forecast inflation using ARIMA models. Diagnostic tests indicate that P is I(1). The study presents the ARIMA (1, 1, 3). The diagnostic tests further imply that the presented optimal ARIMA (1, 1, 3) model is stable and acceptable for predicting inflation in the Philippines. The results of the study apparently show that P will fall down from 5.6% in 2018 to approximately 0.3% in 2027. The Bangko Sentral ng Pilipinas is expected to continue implementing it inflation targeting policy framework since it proves to work well for the economy.
    Keywords: Forecasting; Inflation; Philippines
    JEL: C53 E31 E37 E47
    Date: 2019–02–25
  6. By: Bangalore, Mook; Smith, Andrew; Veldkamp, Ted
    Abstract: With 70% of its population living in coastal areas and low-lying deltas, Vietnam is highly exposed to riverine and coastal flooding. This paper conducts a “stress-test” and examines the exposure of the population and poor people in particular to current and future flooding in Vietnam and specifically in Ho Chi Minh City. We develop new high-resolution flood hazard maps at 90 m horizontal resolution, and combine this with spatially-explicit socioeconomic data on poverty at the country and city level, two datasets often kept separate. The national-level analysis finds that a third of today’s population is already exposed to a flood, which occurs once every 25 years, assuming no protection. For the same return period flood under current socioeconomic conditions, climate change may increase the number exposed to 38 to 46% of the population (an increase of 13–27% above current exposure), depending on the severity of sea level rise. While poor districts are not found to be more exposed to floods at the national level, the city-level analysis of Ho Chi Minh City provides evidence that slum areas are more exposed than other urban areas. The results of this paper provide an estimate of the potential exposure under climate change, including for poor people, and can provide input on where to locate future investments in flood risk management.
    Keywords: floods; poverty; Vietnam; exposure; urban development; ES/K006576/1
    JEL: Q50 Q54 I30
    Date: 2018–10–26
    Abstract: This research uses annual time series data on inflation rates in Thailand from 1960 to 2017, to model and forecast inflation using ARMA models. Diagnostic tests indicate that T is I(0). The study presents the ARMA (0, 0, 1) model, which is nothing but an MA (1) process. The diagnostic tests further imply that the presented optimal ARMA (0, 0, 1) model is stable and acceptable. The results of the study apparently show that T will be approximately 4.2% by 2020. Policy makers and the business community in Thailand are expected to take advantage of the anticipated stable inflation rates over the next decade.
    Keywords: Forecasting, inflation, Thailand
    JEL: C53 E31 E37 E47
    Date: 2019–02–25
  8. By: Claude Ménard (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, LKYSPP - Lee Kuan Yew School of Public Policy, National University of Singapore)
    Abstract: This contribution is about the ‘progressive research program', as Imre Lakatos would have called it, initiated by New Institutional Economics. After a short reminder of the ‘golden triangle' of concepts and tools introduced by the founders (Coase, North, Ostrom, Williamson) and their followers, the paper turns to a quick overview of the attainments of this paradigm along its dominant branches: organization theory and institutional analysis. The emphasis is on the new paths opening up, with a focus on two key issues: hybrid arrangements, which may well be the prevailing organization of transactions in developed market economies; and intermediate, ‘meso-institutions', which likely provide the missing link between the general rules framing socioeconomic activities and the actors operating within these rules. The underlying argument is that whatever happens to the label ‘NIE', this research program will remain with us for a long time ahead.
    Abstract: Este artigo trata do "programa de pesquisa" – conforme Imre Lakatos o chamaria – iniciado pela Nova Economia Institucional (NEI). Após um breve resumo do "triângulo de ouro" de ferramentas teóricas e conceitos introduzidos pelos fundadores da NEI e seus seguidores, o trabalho apresenta uma visão geral das conquistas do paradigma em suas correntes dominantes: teoria da organização e análise institucional. Ênfase é dada a novas avenidas de pesquisa, com foco em dois temas-chave: arranjos híbridos, que possivelmente constituem a principal maneira de organização de transações em economias de mercado desenvolvidas; e "meso-instituições" intermediárias, que provavelmente fornecem a ligação não identificada entre as regras gerais que influenciam atividades socioeconômicas e os atores que operam com base em tais regras. O argumento central é o seguinte: independentemente do que ocorrer com a etiqueta "NEI", este programa de pesquisa permanecerá entre nós por um longo período adiante.
    Keywords: New institutional economomics,Organization theory,Institutional analysis
    Date: 2018–01

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