nep-sea New Economics Papers
on South East Asia
Issue of 2020‒09‒07
27 papers chosen by
Kavita Iyengar
Asian Development Bank

  1. An Empirical Argument for Mass Testing: Crude Estimates of Unreported COVID19 Cases in the Philippines vis-Ã -vis Others in the ASEAN-5 By Jan Fredrick Cruz
  2. Which islamic equity market is the leading one in Southeast Asia ? evidence from some select equity markets By Ariffian, Suffian; Masih, Mansur
  3. The impacts of the COVID-19 crisis on maternal and child malnutrition in Myanmar: What to expect, and how to protect [in Burmese] By Headey, Derek D.; Cho, Ame; Goudet, Sophie; Oketch, Jecinter Akinyi; Oo, Than Zaw
  4. Disaster impacts and financing: Local insights from the Philippines By Arlan Brucal; Viktor Roezer; Denyse S. Dookie; Rebecca Byrnes; Majah-Leah V. Ravago; Faye Cruz; Gemma Narisma
  5. Monitoring the impact of COVID-19 in Myanmar: Mechanization service providers - July 2020 survey round By Takeshima, Hiroyuki; Win, Myat Thida; Masias, Ian
  6. Monitoring the impact of COVID-19 in Myanmar: Mechanization service providers – June 2020 survey round [in Burmese] By Takeshima, Hiroyuki; Win, Myat Thida; Masias, Ian
  7. Monitoring the impact of COVID-19 in Myanmar: Yangon peri-urban poultry farmers - Late June 2020 survey round [in Burmese] By Fang, Peixun; Belton, Ben; Ei Win, Hnin; Zhang, Xiaobo
  8. On the Effects of Monetary Policy in Vietnam: Evidence from a Trilemma Analysis By Hoang, Viet-Ngu; Nguyen, Duc Khuong; Pham, Tuan Anh
  9. Monitoring the impact of COVID-19 in Myanmar: Agricultural equipment retailers - June 2020 survey round By Takeshima, Hiroyuki; Win, Myat Thida; Masias, Ian
  10. Una aproximación a los determinantes de acumulación de reservas internacionales en economías emergentes By Cristian Camilo Porras-Alarcón
  11. Implications of state-dependent pricing for DSGE model-based policy analysis in Indonesia By Denny Lie
  12. The Impact of Monetary Policy Communication in an Emerging Economy: The Case of Indonesia By Calixte Ahokpossi; Agnes Isnawangsih; Md. Shah Naoaj; Ting Yan
  13. How Do World Commodity Prices Affect Asian Commodity Exporting Economies?: The Role of Financial Frictions By Shigeto KITANO
  14. Ambiguity Aversion and Individual Adaptation to Climate Change: Evidence from a Farmer Survey in Northeastern Thailand By Yoshioka, Nagisa; Yokoo, Hide-Fumi; Saengavut, Voravee; Bumrungkit, Siraprapa
  15. Regional Convergence and Spatial Dependence across Subnational Regions of ASEAN: Evidence from Satellite Nighttime Light Data By Mendez-Guerra, Carlos; Santos-Marquez, Felipe
  16. Development Strategies for the Vulnerable Small Island Developing States (SIDS) By Augustin Kwasi Fosu; Dede Woade Gafa
  17. Social inclusion and financial inclusion: international evidence By Ozili, Peterson K
  18. Sustainable Development Goals (SDGs) and employment policies in the Philippines By Yap, Josef T.; Tabuga, Aubrey D.; Mina, Christian D.
  19. Why Are So Many Children Stunted in the Philippines ? By Capanzana,Mario V.; Demombynes,Gabriel; Gubbins,Paul Michael
  20. International Law and Fundamental Human Rights - Ensuring Accountability for the Downing of Flight MH 17 By Titus Corlatean
  21. Predicted COVID-19 Fatality Rates Based on Age, Sex, Comorbidities, and Health System Capacity By Selene Ghisolfi; Ingvild Almås; Justin Sandefur; Tillmann von Carnap; Jesse Heitner; Tessa Bold
  22. From Fear to Hate: How the Covid-19 Pandemic Sparks Racial Animus in the United States By Runjing Lu; Yanying Sheng
  23. The Lack of Convergence of Latin-America Compared with CESEE: Is Low Investment to Blame? By Bas B. Bakker; Manuk Ghazanchyan; Alex Ho; Vibha Nanda
  24. TINFORGE – Trade in INFORGE. Methoden-Update 2020 By Anke Mönnig; Dr. Marc Ingo Wolter
  25. A Dynamic Choice Model with Heterogeneous Decision Rules: Application in Estimating the User Cost of Rail Crowding By Prateek Bansal; Daniel H\"orcher; Daniel J. Graham
  26. Nepal; Selected Issues By International Monetary Fund
  27. Skill Loss during Unemployment and the Scarring Effects of the COVID-19 Pandemic By Paul Jackson; Victor Ortego-Marti

  1. By: Jan Fredrick Cruz (Economics Department, Ateneo de Manila University)
    Abstract: Introduction. International media has considered the Philippines as the country with the longest and strictest quarantine measures in the world. At the same time, the government has not pursued aggressive mass testing due to perceived resource constraints. This study presents an empirical support for a mass testing policy. Method. Crude estimates for “true†COVID19 prevalence are made using adjusted case fatality ratios and reported COVID19 cases for the Philippines, Indonesia, Malaysia, and Thailand. Singapore figures are utilized as baseline in the computations because of the island-nation’s widespread testing strategy. Results. The analysis reveals that 96-99% of COVID19 cases in the ASEAN-5 were undetected during April-June 2020. Roughly three million Filipinos (2.6% of the national population) may have been infected by the virus in the same period—the worst record in the ASEAN-5 group in percentage terms. Discussion. The findings reinforce the WHO recommendation of “test, trace, and isolate.†Broad-base testing is urgently needed to reduce the magnitude of undetected COVID19 cases. The Philippine government must devote necessary resources to do this; the economic and social costs of not doing so are greater.
    Keywords: COVID19; case fatality ratio; epidemic; pandemic
    JEL: H51 I18
    Date: 2020–08
  2. By: Ariffian, Suffian; Masih, Mansur
    Abstract: Islamic finance has been growing well around the globe since the subprime crisis of 2007-2008. The Southeast Asia is one of the top areas of growth of Islamic finance but there has not been any research done yet as to which Islamic equity market has been the leading one in the Southeast Asia. This study makes an attempt to fill in that gap. In particular this study asks the following questions:(i)which Islamic equity market is the leading one in Southeast Asia ? (ii) whether the international and conventional equity markets had any bearing on the Islamic equity markets in South East Asia and (iii) which Islamic equity index in South East Asia could be used as the benchmark index? Our findings tend to indicate that (i) amongst the South East Asia countries, Malaysia is relatively the most leading Islamic equity market (ii) the international and conventional markets appear to have a significant impact on the Islamic markets in Southeast Asia (iii) for an investor interested in Islamic equity investment in South East Asia region, he/she could use the Malaysian Islamic market as the benchmark index.
    Keywords: Islamic equity markets, Southeast Asia, VECM, VDC
    JEL: C22 C58 E44 G15
    Date: 2018–09–19
  3. By: Headey, Derek D.; Cho, Ame; Goudet, Sophie; Oketch, Jecinter Akinyi; Oo, Than Zaw
    Keywords: MYANMAR, BURMA, SOUTHEAST ASIA, ASIA, Coronavirus, coronavirus disease, Coronavirinae, nutrition, child nutrition, maternal nutrition, malnutrition, Covid-19
    Date: 2020
  4. By: Arlan Brucal (The Grantham Research Institute on Climate Change and the Environment (GRICCE)); Viktor Roezer (The Grantham Research Institute on Climate Change and the Environment (GRICCE)); Denyse S. Dookie (The Grantham Research Institute on Climate Change and the Environment (GRICCE)); Rebecca Byrnes (The Grantham Research Institute on Climate Change and the Environment (GRICCE)); Majah-Leah V. Ravago (Economics Department, Ateneo de Manila University); Faye Cruz (Manila Observatory); Gemma Narisma (Manila Observatory and Physics Department, Ateneo de Manila University)
    Abstract: The Philippines is a country with high exposure to natural hazards and with limited resources for dealing with them. It is therefore vital that available funding for disaster preparedness and relief is allocated based on accurate forecasts and evidence. Disaster Risk Managers play an integral role in the delivery of disaster preparedness and relief. A 2016–17 survey of Disaster Risk Managers identified important differences in how Managers perceive risk and their levels of preparedness across the country in light of differing storm impacts since 2009. Pre-disaster preparedness receives less funding than post-disaster relief. Greater financing for preparedness, based on an improved understanding of Disaster Risk Managers’ perceptions and needs and better communication of future climate risk, is needed in order to help vulnerable communities more effectively before a disaster occurs.
    Keywords: Disaster risk management, local governance, Philippines, hydrometeorological hazards
    JEL: Q54 Q58 H84
    Date: 2020–08
  5. By: Takeshima, Hiroyuki; Win, Myat Thida; Masias, Ian
    Abstract: Mechanization service providers in Myanmar were originally interviewed by telephone in May 2020 and again in June 2020 to determine how their businesses were being affected by COVID-19 related restrictions. The results of those surveys were published in Myanmar Strategy Support Program Policy Notes 07 and 12, respectively. To trace the continuing impact of the COVID-19 pandemic on their economic activities, a third phone survey of mechanization service providers was done in early-July 2020. This Note reports on the results of the third survey, as well as some trends since the first and the second surveys.
    Keywords: MYANMAR, BURMA, SOUTHEAST ASIA, ASIA, Coronavirus, coronavirus disease, Coronavirinae, mechanization, monitoring, non-pharmaceutical interventions, Covid-19
    Date: 2020
  6. By: Takeshima, Hiroyuki; Win, Myat Thida; Masias, Ian
    Keywords: MYANMAR, BURMA, SOUTHEAST ASIA, ASIA, Coronavirus, coronavirus disease, Coronavirinae, mechanization, monitoring, non-pharmaceutical interventions
    Date: 2020
  7. By: Fang, Peixun; Belton, Ben; Ei Win, Hnin; Zhang, Xiaobo
    Keywords: MYANMAR, BURMA, SOUTHEAST ASIA, ASIA, Coronavirus, coronavirus disease, Coronavirinae, farmers, poultry, food prices, food consumption, poultry farming, urban farmers, broiler chickens, cash flow, livestock products, economic recovery, Covid-19
    Date: 2020
  8. By: Hoang, Viet-Ngu; Nguyen, Duc Khuong; Pham, Tuan Anh
    Abstract: During and after the 2008-2009 global financial crisis, the growth cycle of Vietnam’s economy has shifted from an average annual growth rate of 7%-8% to an average annual growth rate of 5%-6% with a high level of macroeconomic instability and uncertainty from 2009 till 2016. Related studies have speculated that the operations of monetary policies during this period were not effective in recovering the economic growth and stabilizing the overall price level and total output level. This paper provides the first empirical examination of this speculation using the Trilemma framework. Our empirical results show that the State Bank of Vietnam has had adopted a set of policies aiming at maintaining exchange rate stability and interest rate independence while easing the restrictions on capital inflows. The combination of these three monetary policy approaches is found to violate the rule of Trilemma. Consequently, exchange rate and interest rate policies became less effective and failed to stabilize the economy in response to the global economic recession.
    Keywords: Vietnamese economy; Trilemma; monetary policy; economic recession; macroeconomic conditions.
    JEL: F31 F33 F36
    Date: 2019–11
  9. By: Takeshima, Hiroyuki; Win, Myat Thida; Masias, Ian
    Abstract: Agricultural equipment retailers (ER) in Myanmar were originally interviewed by telephone in late May 2020 to determine how their businesses were being affected by COVID-19 related restrictions. The results of that survey were published in Myanmar Strategy Support Program Policy Note 09. To trace the continuing impact of the COVID-19 pandemic on their economic activities, a second phone survey of ERs was done in late June 2020. This Policy Note reports on the results of this second survey.
    Keywords: MYANMAR, BURMA, SOUTHEAST ASIA, ASIA, Coronavirus, coronavirus disease, Coronavirinae, equipment, farm equipment, supply chains, policies, sales, arid zones, Covid-19, retailers, agricultural equipment retailers (ERs), agricultural equipment sales, equipment availability, equipment price
    Date: 2020
  10. By: Cristian Camilo Porras-Alarcón (Banco de la República de Colombia)
    Abstract: La creciente acumulación de reservas internacionales en las últimas dos décadas en las economías emergentes ha promovido un desarrollo de estudios que intentan explicar las causas de dicha acumulación. Parte de estos estudios han propuesto algunas métricas de nivel óptimo o adecuado de reservas, encontrando que la mayoría de las economías emergentes mantiene un nivel de reservas superior al propuesto, existiendo un exceso de acumulación de reservas. En este documento se exploran algunas variables no consideradas en la literatura como el balance en cuenta corriente, la participación de los extranjeros en el mercado de deuda pública local y la existencia de alternativas de financiación como los fondos soberanos y las líneas de crédito flexible del FMI como posibles determinantes del exceso (o defecto, según sea el caso) de acumulación de reservas que no es explicado por los determinantes convencionales. Se encuentra que las economías latinoamericanas han respondido con mayor acumulación de reservas a la ampliación del déficit en cuenta corriente mientras que las economías asiáticas y europeas podrían estar acumulando reservas con un objetivo mercantilista al mantener un exceso de reservas al tiempo que mantienen un superávit en la cuenta corriente. Asimismo, se encuentra que los países que han presentado el mayor aumento de la participación de extranjeros en el mercado interno de deuda pública han aumentado su nivel de reservas mientras que las alternativas de financiación son sustitutas a la acumulación de reservas en Latinoamérica y complementarias en Asia y Europa del Este. **** ABSTRACT: The growing accumulation of international reserves by emerging market economies in the last two decades has promoted a development of studies that attempt to explain the causes of such accumulation. Some of these studies have proposed some metrics about the optimal or adequate level of reserves, finding that most emerging market economies maintain a higher level of reserves than the proposed one, prevailing a reserves accumulation excess. This document explores some variables that have not been considered in the literature such as the current account balance, the foreign participation in the local debt market and the presence of financing alternatives such as sovereign wealth funds and the IMF flexible credit lines as possible determinants of reserves accumulation excess (or defect) that is not explained by conventional determinants. It is found that Latin American economies have responded with higher reserves accumulation to the widening of the current account deficit, while Asian and European economies could be accumulating reserves with a mercantilist objective by maintaining a reserve excess while maintaining a surplus in the current account. Likewise, it is found that countries that have presented the greatest increase in foreign participation in local debt market, have increased their reserves level, while financing alternatives are not substitutes but complementary to reserves accumulation.
    Keywords: Reservas internacionales, regresión cuantílica, economía internacional, International reserves, quantile regression, international economics
    JEL: C21 F00 F30
    Date: 2020–08
  11. By: Denny Lie
    Abstract: This paper studies the implications of state-dependent pricing in a small open-economy dynamic stochastic general equilibrium (DSGE) model for Indonesia. I show that variations in the timing and frequency of price adjustment inherent in a state-dependent pricing assumption could have important implications for DSGE model-based policy analysis in Indonesia. This extensive margin effect produces disparities in the conditional variance decompositions and the impulse responses to various shocks responsible for business cycle fluctuations. An investigation into the impact of COVID-19 pandemic shocks indicates that such variations non-trivially affect the analysis on the appropriate degree of monetary policy response to the shocks. A state-dependent pricing model would call for a greater degree of monetary easing in response to the COVID-19 pandemic, than that prescribed by a traditional time-dependent pricing model. The broader implication is clear. For modelling and analyzing the Indonesian economy, in which the inflation rates have historically been moderate-to-high and highly variable, state-dependent pricing is an essential model feature.
    Keywords: state-dependent pricing, monetary policy, DSGE model for Indonesia, COVID-19 pandemic
    JEL: E12 E32 E58 E61 F41
    Date: 2020–08
  12. By: Calixte Ahokpossi; Agnes Isnawangsih; Md. Shah Naoaj; Ting Yan
    Abstract: Since the adoption of the inflation targeting framework by Bank Indonesia (BI), monetary policy communication has played an increasingly important role in BI’s policy toolkit. This paper assesses BI’s monetary policy communication from three perspectives: i) its transparency and clarity, ii) its ability to align market expectation and BI’s policy decisions (predictability), and iii) its impact on financial markets. In particular, we assess the impact of BI’s monetary policy practices by focusing on its monetary policy press releases and monetary policy reports. The results show that Bank Indonesia has made significant progress in the transparency of its communication as well as in the institutional framework to support this. Nonetheless, the results also suggest ways in which the impact of communication can be further improved, including by strengthening the clarity of policy messages, its consistency with the policy framework and the depth of the money market.
    Date: 2020–06–26
  13. By: Shigeto KITANO (Research Institute for Economics and Business Administration, Kobe University)
    Abstract: This note examines how recent volatile fluctuations of world commodity prices due to the COVID-19 shock affect Asian commodity exporting economies. Our analysis shows that a drop in world commodity prices has a significant negative impact on output, consumption, and investment of sample countries. However, the impact on trade balance is positive in some countries and negative in others. The difference between these two groups is attributable to whether world commodity prices affect each country's interest rate spreads.
    Keywords: Commodity prices; Asian emerging economies; Financial frictions; SVAR; Interest rate spreads; Commodity exporting economies; Trade balances; COVID-19 shock
    JEL: E32 E37 E44 F32 F36 F41 F44 F62 O16 Q43
    Date: 2020–08
  14. By: Yoshioka, Nagisa; Yokoo, Hide-Fumi; Saengavut, Voravee; Bumrungkit, Siraprapa
    Abstract: Understanding the triggers of individual adaptation behavior is critical for empowering those who are highly vulnerable to climate change. This study explores the effect of ambiguity aversion on adaptation behaviors in the context of climate change. We conduct a field survey on 230 rice farmers in northeastern Thailand to examine the association between the elicited ambiguity aversion and the implementation of climate change adaptation. We find that ambiguity aversion does not encourage farmers’ adaptation behaviors and can even discourage the uptake of adaptation strategies. The role of ambiguity aversion varies depending on the characteristics of the adaptation strategy: Ambiguity-averse farmers are less likely to adopt adaptation strategies that entail shifts from the status quo. A deliberate approach is needed to understand farmers’ adaptation behaviors outside the laboratory setting and to reduce ambiguity in the results concerning adaptation to increasing climate risk.
    Keywords: ambiguity aversion, climate change adaptation, Thailand, weather index insurance
    JEL: O13 Q12 Q54
    Date: 2020–08
  15. By: Mendez-Guerra, Carlos; Santos-Marquez, Felipe
    Abstract: Satellite nighttime light data are increasingly used for evaluating the performance of economies in which official statics are non-existent, limited, or non-comparable. In this paper,we use a novel luminosity-based measure of GDP per capita to study regional convergence and spatial dependence across 274 subnational regions of the Association of South East Asian Nations(ASEAN) over the 1998-2012 period. Specifically, we first evaluate the usefulness of this new luminosity indicator in the context of ASEAN regions. Results show that almost 60 percent of the differences in (official) GDP per capita can be predicted by this luminosity-based measure of GDP. Next, given its potential usefulness for predicting regional GDP, we evaluate the spatio-temporal dynamics of regional inequality across ASEAN. Results indicate that although there is an overall (average) process of regional convergence, regional inequality within most countries has not significantly decreased. When evaluating the patterns of spatial dependence, we find increasing spatial dependence over time and stable spatial clusters (hotspots and coldspots) that are located across multiple national boundaries. Taken together, these results provide a new and more disaggregated perspective of the integration process of the ASEAN community.
    Keywords: convergence spatial dependence satellite nighttime light data luminosity subnational regions ASEAN
    JEL: O57 R10 R11
    Date: 2020–08–17
  16. By: Augustin Kwasi Fosu (Institute of Statistical, Social, and Economic Research, University of Ghana, Legon, Ghana; Faculty of Economic and Management Sciences, University of Pretoria, Pretoria, South Africa; Centre for the Study of African Economies (CSAE), University of Oxford, Oxford, UK); Dede Woade Gafa (Department of Economics, University of Ghana, Legon, Ghana)
    Abstract: This paper draws on the examples of two well-performing small island developing states (SIDS), Mauritius and Singapore, to provide lessons for vulnerable SIDS on strategies that can help overcome their inherent vulnerabilities and promote economic development. The paper concludes that building human and institutional capacities, boosting exports and infrastructure development, and promoting foreign direct investment and industrialization under a strong public-private sector institutional partnership are key to fostering economic resilience and achieving sustainable development.
    Date: 2020–08
  17. By: Ozili, Peterson K
    Abstract: This paper investigates the association between social inclusion and financial inclusion. Social inclusion and financial inclusion are two major development policy agenda in many countries, and the association between them has received little attention in the policy and academic literature. Using correlation analysis, the findings reveal a positive and significant correlation between social inclusion and financial inclusion for Asian countries, Middle Eastern countries and African countries while the correlation between social inclusion and financial inclusion is negative for European countries. The findings also show that European and Asian economies experience higher levels of social inclusion and account ownership in a formal financial institution while African countries and Middle Eastern countries experience lower levels of social inclusion and account ownership. The implication of the findings is that some socially inclusive societies tend to enjoy greater financial inclusion while other socially inclusive societies may experience lower financial inclusion. The study provides insights for researchers, decision makers, and practitioners to understand the association between financial and social inclusion.
    Keywords: financial inclusion, social inclusion, sustainability, access to finance, account ownership
    JEL: O1 O2
    Date: 2020
  18. By: Yap, Josef T.; Tabuga, Aubrey D.; Mina, Christian D.
    Keywords: employment creation, economic development, structural change, labour market policy, sectoral planning, youth employment
    Date: 2020
  19. By: Capanzana,Mario V.; Demombynes,Gabriel; Gubbins,Paul Michael
    Abstract: Nearly one in three children under age five in the Philippines is stunted, a key marker of undernutrition. This rate is high for the country's level of income. This paper provides the first detailed multivariate analysis of potential drivers of stunting in the Philippines, using data from the 2015 National Nutrition Survey. Potential drivers are analyzed individually and grouped in major categories. The analysis finds that stunting between 24-60 months is principally associated with suboptimal prenatal conditions and inadequate food security and diversity. If the results are given a causal interpretation, they imply that if all Filipino newborns had adequate prenatal conditions, the fraction stunted at age 24-60 months would fall by 20 percent. Similarly, providing adequate food security and diversity to all Filipino children would reduce stunting by 22 percent. Other factors -- including access to water, sanitation, and environmental conditions -- have less strong associations with stunting. The results point to a series of policy priorities to reduce stunting: supporting the nutrition and health of expectant mothers, ensuring access to contraception to reduce adolescent pregnancy, and ensuring that children consume a variety of healthy foods, including protein-dense foods such as milk, meat, and eggs.
    Keywords: Reproductive Health,Early Child and Children's Health,Nutrition,Health Care Services Industry,Educational Sciences,Hydrology
    Date: 2020–06–23
  20. By: Titus Corlatean (“Dimitrie Cantemir†Christian University, Bucharest, Romania)
    Abstract: The Parliamentary Assembly of the Council of Europe (PACE) started in January 2020 its work on the draft report entitled: “Ensuring accountability for the downing of flight MH 17†(rapporteur Titus Corlatean, SOC, Romania). The future report will have as main task to inquire about the extent to which countries have carried out investigations required under the European Convention on Human Rights and co-operated with one another as instructed by the United Nations Security Council and to make appropriate recommendations. Essentially, the facts under investigation are related to the shot down of the Malaysia Airlines flight MH 17 over Eastern Ukraine on 17 July 2014, during a decisive phase of the conflict between separatists, backed by Russia, and the Ukrainian military. A first Introductory memorandum was presented by the rapporteur in January 2020 to the PACE Legal Affairs and Human Rights Committee, underlining the key elements of his mandate for ensuring the accountability for the shot down of flight MH 17 and the terrible loss of the life of 283 passengers and 15 crew members. The committee accepted to declassify the memorandum. The main initial conclusions and the guidelines for the future work to finalize the report are presented as follows.
    Keywords: flight MH 17, shot down, accountability, European Convention on Human Rights, Ukraine, Russia, Netherlands, separatists, Security Council
    Date: 2020–04
  21. By: Selene Ghisolfi (Institute for International Economic Studies, Stockholm University; LEAP, Bocconi University); Ingvild Almås (Institute for International Economic Studies, Stockholm University); Justin Sandefur (Center for Global Development); Tillmann von Carnap (Institute for International Economic Studies, Stockholm University); Jesse Heitner (Aceso Global); Tessa Bold (Institute for International Economic Studies, Stockholm University)
    Abstract: Early reports suggest the fatality rate from COVID-19 varies greatly across countries, but non-random testing and incomplete vital registration systems render it impossible to directly estimate the infection fatality rate (IFR) in many low- and middle-income countries. To fill this gap, we estimate the adjustments required to extrapolate estimates of the IFR from high- to lower-income regions. Accounting for differences in the distribution of age, sex, and relevant comorbidities yields substantial differences in the predicted IFR across 21 world regions, ranging from 0.11% in Western Sub-Saharan Africa to 1.07% for High Income Asia Pacific. However, these predictions must be treated as lower bounds, as they are grounded in fatality rates from countries with advanced health systems. In order to adjust for health system capacity, we incorporate regional differences in the relative odds of infection fatality from childhood influenza. This adjustment greatly diminishes, but does not entirely erase, the demography-based advantage predicted in the lowest income settings, with regional estimates of the predicted COVID-19 IFR ranging from 0.43% in Western Sub-Saharan Africa to 1.83% for Eastern Europe.
    Keywords: COVID-19
    Date: 2020–06–12
  22. By: Runjing Lu; Yanying Sheng
    Abstract: We estimate the effect of the Coronavirus (Covid-19) pandemic on racial animus, as measured by Google searches and Twitter posts including a commonly used anti-Asian racial slur. Our empirical strategy exploits the plausibly exogenous variation in the timing of the first Covid-19 diagnosis across regions in the United States. We find that the first local diagnosis leads to an immediate increase in racist Google searches and Twitter posts, with the latter mainly coming from existing Twitter users posting the slur for the first time. This increase could indicate a rise in future hate crimes, as we document a strong correlation between the use of the slur and anti-Asian hate crimes using historic data. Moreover, we find that the rise in the animosity is directed at Asians rather than other minority groups and is stronger on days when the connection between the disease and Asians is more salient, as proxied by President Trump's tweets mentioning China and Covid-19 at the same time. In contrast, the negative economic impact of the pandemic plays little role in the initial increase in racial animus. Our results suggest that de-emphasizing the connection between the disease and a particular racial group can be effective in curbing current and future racial animus.
    Date: 2020–07
  23. By: Bas B. Bakker; Manuk Ghazanchyan; Alex Ho; Vibha Nanda
    Abstract: In the last few decades there has been little convergence of income levels in Latin America with those in the United States, in sharp contrast with both emerging Asia and emerging Europe. This paper argues that lack of convergence was not the result of low investment. Latin America is poorer because of lower human capital levels and lower TFP—not because of a lower capital-output ratio. Cross-country differences of TFP in turn are associated with differences in human capital, governance and business climate indicators. We demonstrate that once levels of human capital and governance are taken into account, there is strong conditional cross-country convergence. Poor countries with high levels of human capital, governance or business climate indicators converge rapidly. Poor countries without those attributes do not. We show that low investment is the result of low TFP and thus GDP growth—not the cause.
    Date: 2020–06–19
  24. By: Anke Mönnig (GWS - Institute of Economic Structures Research); Dr. Marc Ingo Wolter (GWS - Institute of Economic Structures Research)
    Abstract: Das Welthandelsmodell TINFORGE wurde 2014 (Wolter et al. 2014) mit dem Ziel entwickelt, eine möglichst detaillierte Abbildung des Außenhandels in das nationale makroökonometrische Input-Output-Modell INFORGE (Ahlert et al. 2009) zu integrieren. Aufgabe des TINFORGE-Modells ist es, sowohl eine breite Abdeckung an Ländern weltweit zu erreichen als auch eine jährliche Aktualisierbarkeit zu gewährleisten. Die breite Abdeckung von Ländern ist notwendig, da so neue Partnerländer in Afrika oder Asien, von denen im Welthandel eine große Dynamik ausgeht, sichtbar werden (z. B. Nigeria oder Vietnam) und deren Wirkungen auf den deutschen Export abschätzbar sein sollen. Die jährliche Aktualisierung wird angestrebt, da konjunkturelle Schwankungen und Handelsbarrieren vor allem in den letzten Jahren deutlich zugenommen haben. Um deren Wirkungen zu beobachten und nicht nur beschreiben zu können, ist dies eine Voraussetzung für eine empirisch basierte Projektion des Welthandels. Um also eine schnelle und zeitnahe Aktualisierung zu gewährleisten, wurde TINFORGE entwickelt und seit der Version INFORGE14_1 als integraler Bestandteil für die Abschätzung der Folgen des Welthandels für deutsche Exporte in INFORGE verwendet. Mit der Aktualisierung von TINFORGE zu Beginn des Jahres 2020 wurden leichte Veränderungen zum Methodenpapier Mönnig & Wolter (2019) vorgenommen. Das vorliegende Diskussionspapier beschreibt den aktuellen Modellstand von TINFORGE.
    Keywords: Makroökonomischer Modellbau, Welthandel, Bilaterale Handelsmatrizen, Ländermodelle
    JEL: C51 F14 F17
    Date: 2020
  25. By: Prateek Bansal; Daniel H\"orcher; Daniel J. Graham
    Abstract: Crowding valuation of subway riders is an important input to various supply-side decisions of transit operators. The crowding cost perceived by a transit rider is generally estimated by capturing the trade-off that the rider makes between crowding and travel time while choosing a route. However, existing studies rely on static compensatory choice models and fail to account for inertia and the learning behaviour of riders. To address these challenges, we propose a new dynamic latent class model (DLCM) which (i) assigns riders to latent compensatory and inertia/habit classes based on different decision rules, (ii) enables transitions between these classes over time, and (iii) adopts instance-based learning theory to account for the learning behaviour of riders. We use the expectation-maximisation algorithm to estimate DLCM, and the most probable sequence of latent classes for each rider is retrieved using the Viterbi algorithm. The proposed DLCM can be applied in any choice context to capture the dynamics of decision rules used by a decision-maker. We demonstrate its practical advantages in estimating the crowding valuation of an Asian metro's riders. To calibrate the model, we recover the daily route preferences and in-vehicle crowding experiences of regular metro riders using a two-month-long smart card and vehicle location data. The results indicate that the average rider follows the compensatory rule on only 25.5% of route choice occasions. DLCM estimates also show an increase of 47% in metro riders' valuation of travel time under extremely crowded conditions relative to that under uncrowded conditions.
    Date: 2020–07
  26. By: International Monetary Fund
    Abstract: This Selected Issues paper examines the degree to which inflation co-moves between India and a panel of countries in Asia. The paper shows that the considerable co-movement in headline inflation rates between India and Nepal is driven almost exclusively by food-inflation co-movement. By contrast, the role for inflation spillovers emanating from India in driving non-food inflation in Nepal appears limited. The implication is that Nepal should rely on domestic monetary policy rather than stable inflation in India to achieve stable domestic inflation. The main takeaway from the results is that food inflation co-movement between India and other countries is higher in cases where the co-movement in rainfall deviations from seasonal norms is highest. Since core inflation co-movement is weak, idiosyncratic domestic factors such as economic slack, exchange-rate movements, and differing degrees of passthrough from food- and energy-price shocks play an important role. This finding is critically important for monetary policy, especially since domestic policy is primarily effective only in controlling core inflation. Thus, domestic monetary policy needs to be calibrated to domestic inflationary pressures—Nepal cannot necessarily rely on stable inflation in India to achieve stable domestic inflation.
    Keywords: Financial sector development;Development;Intergovernmental fiscal relations;Fiscal policy;Financial sector;Macroprudential policies and financial stability;Public financial management;Financial services;Financial infrastructure;fiscal federalism,NRB,federalism,core inflation,subnational
    Date: 2019–02–17
  27. By: Paul Jackson (National University of Singapore); Victor Ortego-Marti (Department of Economics, University of California Riverside)
    Abstract: We integrate the SIR epidemiology model into a search and matching framework in which workers lose human capital during unemployment. As the number of infections rises, fewer jobs are created, the unemployment rate increases and the composition of skills among the unemployed deteriorates, thereby reducing TFP. We calibrate the model to quantify the effect of a three month lockdown on TFP through loss of skill during unemployment. Sixty-two weeks after the pandemic begins, TFP reaches its lowest value with a decline of 0.56%, which is nearly 50% of the productivity losses typically seen in recessions.
    Keywords: COVID-19; Skill loss; TFP; Search and matching; Unemployment; Pandemics
    JEL: E2
    Date: 2020–09

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