nep-sea New Economics Papers
on South East Asia
Issue of 2021‒03‒15
23 papers chosen by
Kavita Iyengar
Asian Development Bank

  1. Inequalities and environmental changes in the Mekong region: A systematic mapping By Etienne ESPAGNE; Thi Phuong Linh HUYNH; Stéphane LAGREE; Alexis DROGOUL
  2. Strategy for Transforming Indonesian Agriculture By Keijiro Otsuka
  3. The Asian blockchain centers By Demary, Markus; Demary, Vera
  4. Indonesia’s Financial Markets and Monetary Policy Dynamics Amid the Covid-19 Pandemic By Sugandi, Eric Alexander
  5. Sex ratio at birth in Vietnam among six subnational regions during 1990–2050, estimation and probabilistic projection using a Bayesian hierarchical time series model By Chao, Fengqing; Guilmoto, Christophe Z.; Ombao, Hernando
  6. Evaluating Education Systems By Nicolas Gravel; Edward Levavasseur; Patrick Moyes
  7. A Comparison of Indonesia E-Commerce Sentiment Analysis for Marketing Intelligence Effort By Andry Alamsyah; Fatma Saviera
  8. Indonesia; 2020 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Indonesia By International Monetary Fund
  9. Sales Prediction Model Using Classification Decision Tree Approach For Small Medium Enterprise Based on Indonesian E-Commerce Data By Raden Johannes; Andry Alamsyah
  10. What has been happening to Indonesia’s Manufacturing Industry? By Kiki Verico
  11. Spaces of Intermediation and Political Participation: a Study of KuSumpur pahadI redevelopment project By Naomi Prachi Hazarika
  13. Displaced Sand, Displaced People: Examining the Livelihood Impacts of Sand Mining in Cambodia By Melissa MARSCHKE; Jean-François ROUSSEAU; Laura BECKWITH; Lukas Van ARRAGON
  14. Pusatnya Obat Aborsi Cytotec Asli 085713148808 Gresik Jual Obat Penggugur Kandungan Janin Asli Telat Bulan Di Gresik By , budana
  15. Relation between OCB, conflict managing, and productivity: A comparative analysis on the single working women in Vietnam and UAE By Kauffman, Howel
  16. Indonesia; Selected Issues By International Monetary Fund
  17. Heterogeneous impact of internet availability on female labour market outcomes in an emerging economy: Evidence from Indonesia By Niken Kusumawardhani; Rezanti Pramana; Nurmala Saputri; Daniel Suryadarma
  18. The Impact of OJK Regulation No. 48/POJK.03/2020 on the Quality of Credit and Risk Management of Banking Credit By Wahyudi, Christanto Arief; Arbay, Evi Aryati
  19. How Do Taxpayers Respond to Tax Subsidy for Long-Term Savings? Evidence from Thailand's Tax Return Data By Athiphat Muthitacharoen; Trongwut Burong; Athiphat Muthitacharoen
  20. Pricing the exotic: Path-dependent American options with stochastic barriers By Alejandro Rojas-Bernal; Mauricio Villamizar-Villegas
  21. A Quantity Theory Framework for Thinking about Monetary Policy By Hetzel, Robert
  22. Event-Based Dynamic Banking Network Exploration for Economic Anomaly Detection By Andry Alamsyah; Dian Puteri Ramadhani; Farida Titik Kristanti
  23. Trade costs and patterns of trade in the Philippines By Eugenia C. Go

  1. By: Etienne ESPAGNE; Thi Phuong Linh HUYNH; Stéphane LAGREE; Alexis DROGOUL
    Abstract: How do accelerating environmental changes impact inequalities and how do rising inequalities affect in reverse environmental dynamics? This paper is built on a systematic mapping (2019-2021) studying the relationship between those two crucial aspects in five Mekong Countries: Cambodia, Laos, Myanmar, Thailand and Vietnam. 14570 scientific and grey literatures were collected and screened by title and abstract, and full text. 2355 items (1978-2020) are included for the systematic mapping. Overall, articles that directly discuss inequalities in relation with environmental changes are rare and recent. Three domains are dominant: resource access and right issues (967 items); climate change and disaster impacts (533 items); and a growing interest on pollution (299 items). Gaps in knowledge are identified in various realms. A repository is built with an open access to all abstract selected references to support further research and projects on sub-topics of the inequality environmental change nexus, and support science-based policy decisions.
    Keywords: Birmanie, Cambodge, Laos, Thaïlande, Vietnam
    JEL: Q
    Date: 2021–03–12
  2. By: Keijiro Otsuka (Graduate School of Economics, Kobe University)
    Abstract: Traditionally, a major role of agriculture in Asia was to produce enough staple foods for food security through intensification of farming system. Today, however, agriculture is expected to contribute to multiple development goals. First, since wage rate h as been increasing in high performing Asian countries, including Indonesia, farm size expansion to introduce labor saving mechanization must be promoted to reduce production cost, particularly in rice farming. Second, considering increasing demand for palm oil and global concern with decreasing forest environment, achieving intensification of oil palm production without extensification is an urgent issue. Third, responding to increasing demand for high value agricultural products (HVPs), such as fresh fruit s and vegetables, for better nutrition and health, agricultural resources must be shifted to the production of these products. Fourth, considering that urban areas are excessively congested, rural areas must provide increased employment opportunities by pr omoting rural industrialization. Based on the literature review, this article proposes strategies (1) to maintain comparative advantage in rice farming, (2) to intensify oil palm production in a sustainable fashion, (3) to increase production of HVPs,and (4) to promote rural industrialization simultaneously in the context of Indonesia.
    Date: 2021–03
  3. By: Demary, Markus; Demary, Vera
    Abstract: Many Asian start-up companies have specialized in blockchain technology. In particular, Hong Kong, Israel and Singapore have the highest blockchain company density in Asia. The determinants for a flourishing blockchain ecosystem are a business-friendly environment for start-ups and the availability of venture capital, while the effects of agglomeration are less pronounced in Asia than in Europe.
    Date: 2021
  4. By: Sugandi, Eric Alexander (Asian Development Bank Institute)
    Abstract: We examine the impact of the COVID-19 pandemic on Indonesia’s financial markets and monetary policy dynamics. We explore five types of financial markets in Indonesia: (1) the Indonesian rupiah (IDR) interbank money market; (2) the US Dollar (USD) interbank money market; (3) government conventional bond (SUN) markets; (4) the stock market; and (5) the USD/IDR spot market. We examine Bank Indonesia's (BI) three types of monetary policy instrument: (1) BI seven-day reverse repo rate; (2) minimum reserve requirement ratios; and (3) BI’s monetary operations. We find that the COVID-19 pandemic causes different impacts of particular monetary policy instruments on Indonesia’s financial markets during the pandemic compared with those in the non-pandemic period.
    Keywords: COVID-19; monetary policy; Indonesia’s financial markets; Bank Indonesia
    JEL: E58 G10
    Date: 2020–11–16
  5. By: Chao, Fengqing (King Abdullah University of Science and Technology); Guilmoto, Christophe Z.; Ombao, Hernando
    Abstract: The sex ratio at birth (SRB, i.e., the ratio of male to female births) in Vietnam has been imbalanced since the 2000s. Previous studies have revealed a rapid increase in the SRB over the past 15 years and the presence of important variations across regions. More recent studies suggested that the nation’s SRB may have plateaued during the 2010s. Given the lack of exhaustive birth registration data in Vietnam, it is necessary to estimate and project levels and trends in the regional SRBs in Vietnam based on a reproducible statistical approach. We compiled an extensive database on regional Vietnam SRBs based on all publicly available surveys and censuses and used a Bayesian hierarchical time series mixture model to estimate and project SRB in Vietnam by region from 1980 to 2050. The Bayesian model incorporates the uncertainties from the observations and year-by-year natural fluctuation. It includes a binary parameter to detect the existence of sex ratio transitions among Vietnamese regions. Furthermore, we model the SRB imbalance using a trapezoid function to capture the increase, stagnation, and decrease of the sex ratio transition by Vietnamese regions. The model results show that four out of six Vietnamese regions, namely, Northern Midlands and Mountain Areas, Northern Central and Central Coastal Areas, Red River Delta, and South East, have existing sex imbalances at birth. The rise in SRB in the Red River Delta was the fastest, as it took only 12 years and was more pronounced, with the SRB reaching the local maximum of 1.146 with a 95% credible interval (1.129, 1.163) in 2013. The model projections suggest that the current decade will record a sustained decline in sex imbalances at birth, and the SRB should be back to the national SRB baseline level of 1.06 in all regions by the mid-2030s.
    Date: 2021–03–03
  6. By: Nicolas Gravel (Centre de Sciences Humaines, Delhi); Edward Levavasseur (Aix-Marseille Université); Patrick Moyes (Université Bordeaux IV)
    Abstract: This paper proposes two dominance criteria for evaluating education systems described as joint distributions of the pupils’ cognitive skill achievements and family backgrounds. The first criterion is shown to be the smallest transitive ranking of education systems compatible with three elementary principles. The first principle requires any improvement in the cognitive skill of a child with a given family background to be recorded favorably. The second principle demands that any child’s cognitive skill be all the more favorably appraised as the child is coming from an unfavorable background. The third principle states that when two different skills and family backgrounds are allocated between two children, it is preferable that the high skill be given to the low background child than the other way around. The criterion considers system A to be better than system B when, for every pair of reference background and skill, the fraction of children with both a lower background and a better skill than the reference is larger in A than in B. Our second criterion completes the first by adding to the three principles the elitist requirement that a mean-preserving spread in the skills of two children with the same background be recorded favorably. We apply our criteria to the ranking of education systems of 43 countries, taking the PISA score in mathematics as the measure of cognitive skills and the largest of the two parents International Socio Economic Index as the indicator of background. We show that, albeit incomplete, our criteria enables conclusive comparisons of about 19% of all the possible pairs of countries. Education systems of fast-growing Asian economies – in particular Vietnam – appear at the top of our rankings while those of relatively wealthy Arabic countries such as Lebanon, United Arab Emirates and Jordan are at the bottom. The fraction of countries that can be ranked successfully happens to be only mildly increased as a result of adding elitism to the three other principles.
    Keywords: Education, systems, evaluation, cognitive skills
    JEL: D63 I21 I23 O57
    Date: 2019–11
  7. By: Andry Alamsyah; Fatma Saviera
    Abstract: The rapid growth of the e-commerce market in Indonesia, making various e-commerce companies appear and there has been high competition among them. Marketing intelligence is an important activity to measure competitive position. One element of marketing intelligence is to assess customer satisfaction. Many Indonesian customers express their sense of satisfaction or dissatisfaction towards the company through social media. Hence, using social media data provides a new practical way to measure marketing intelligence effort. This research performs sentiment analysis using the naive bayes classifier classification method with TF-IDF weighting. We compare the sentiments towards of top-3 e-commerce sites visited companies, are Bukalapak, Tokopedia, and Elevenia. We use Twitter data for sentiment analysis because it's faster, cheaper, and easier from both the customer and the researcher side. The purpose of this research is to find out how to process the huge customer sentiment Twitter to become useful information for the e-commerce company, and which of those top-3 e-commerce companies has the highest level of customer satisfaction. The experiment results show the method can be used to classify customer sentiments in social media Twitter automatically and Elevenia is the highest e-commerce with customer satisfaction.
    Date: 2021–02
  8. By: International Monetary Fund
    Abstract: Indonesia has responded with a bold and comprehensive policy package to cushion the impact of the COVID-19 pandemic. The economy rebounded in the third quarter of 2020, and the economic recovery is projected to strengthen in 2021 and 2022. Strong policy support and an improving global economy will be the main drivers initially, and greater mobility and confidence will follow with the planned vaccination program in 2021. The uncertainty surrounding the growth outlook is larger than usual. Early completion of a widespread vaccination program is an upside risk, while a protracted pandemic remains a downside risk. The macro-financial fallout of the pandemic and economic downturn could be larger than expected, and credit conditions could be slow to improve. Ongoing reforms aimed at promoting investment are expected to help mitigate the scarring effects from the pandemic and put the economy on a sustained growth path that builds on Indonesia’s favorable demographics.
    Date: 2021–03–02
  9. By: Raden Johannes; Andry Alamsyah
    Abstract: The growth of internet users in Indonesia gives an impact on many aspects of daily life, including commerce. Indonesian small-medium enterprises took this advantage of new media to derive their activity by the meaning of online commerce. Until now, there is no known practical implementation of how to predict their sales and revenue using their historical transaction. In this paper, we build a sales prediction model on the Indonesian footwear industry using real-life data crawled on Tokopedia, one of the biggest e-commerce providers in Indonesia. Data mining is a discipline that can be used to gather information by processing the data. By using the method of classification in data mining, this research will describe patterns of the market and predict the potential of the region in the national market commodities. Our approach is based on the classification decision tree. We managed to determine predicted the number of items sold by the viewers, price, and type of shoes.
    Date: 2021–03
  10. By: Kiki Verico (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))
    Abstract: This paper is the second part of the first paper published by the LPEM UI on January 18th 2021 (Verico, 2021a). This first part discussed Indonesia’s output gap, the global pandemic’s impact, and the scenario to avoid the middle-income trap by 2040. In this second part, the paper figures out the manufacturing sector performance from 1968 until 2019, before the global pandemic hit Indonesia’s economy. Indonesia’s economy needs an adjustment that depends on the pandemic containment to achieve even higher economic growth to compensate for economic contraction during the pandemic. This paper finds that Indonesia’s manufacture can boost economic growth, decrease open unemployment and improve productivity. This paper argues that Indonesia can achieve the second wave of the Chenery-Syrquin phenomenon of economic transformation from service to manufacturing through two scenarios: one, medium to long-run over the enhancement of the backward linkage of global value chains (GVCs), and two, natural short-run with the role of information and communication technology (ICT).
    Keywords: economic growth — manufacturing — industrial structure — economic transformation — Information Communication Technology
    JEL: D83 F43 L60 N10 O14
    Date: 2021
  11. By: Naomi Prachi Hazarika
    Abstract: With the aim to understand the nature of urban politics and spaces of intermediation in informal settlements in the face of a major infrastructural project in New Delhi, this article is a study of the recent “In-Situ Slum Redevelopment and Rehabilitation Policy in Public-Private Partnership 2019” adopted by the Delhi Development Authority. The first section of the article examines how the policy engages with the contours of state-citizen relations on paper. The second section identifies key actors and networks engaged in the process of mobilization in one of the 32 settlements that are slated to be redeveloped under this policy. I argue that this policy denies an interface between residents and the state during the implementation of a large infrastructural project and, moreover, seeks to ‘formalize’ the mode of political participation for residents of informal settlements to be redeveloped.mean-preserving spread in the skills of two children with the same background be recorded favorably. We apply our criteria to the ranking of education systems of 43 countries, taking the PISA score in mathematics as the measure of cognitive skills and the largest of the two parents International Socio Economic Index as the indicator of background. We show that, albeit incomplete, our criteria enables conclusive comparisons of about 19% of all the possible pairs of countries. Education systems of fast-growing Asian economies – in particular Vietnam – appear at the top of our rankings while those of relatively wealthy Arabic countries such as Lebanon, United Arab Emirates and Jordan are at the bottom. The fraction of countries that can be ranked successfully happens to be only mildly increased as a result of adding elitism to the three other principles.
    Keywords: Urban Politics, Urban India, Slum Redevelopment, State-Citizen Relations, Mobilization
    JEL: R23 R31 R38
    Date: 2020–07
  12. By: Hafni, Nur
    Abstract: Batu City is known as one of the leading tourist cities in Indonesia because of its extraordinary potential of natural beauty. The purpose of this research is to analysize the actor network in tourism management based on sustainable development in Batu City. This study used a descriptive research method with a qualitative approach. As a result it is recommended to strengthen the role Department of Environmental Service in tourism development policies in Batu City. Batu City Government needs to establish a forum for “Community Conscious Environment” as a controlling agent. Batu City Government also needs to expand cooperation with academics, especially in environmental assessment cooperation.
    Date: 2020–10–26
  13. By: Melissa MARSCHKE; Jean-François ROUSSEAU; Laura BECKWITH; Lukas Van ARRAGON
    Abstract: This working paper focuses on the livelihood impacts of river sand mining in Cambodia. We draw on two examples: (a) that of sand miners, working directly in riverbed sand mining in and around Phnom Penh; and (b) those of urban farmers, whose livelihoods are impacted by the sand infill of urban wetlands. What is consistent across both our cases is how these livelihoods – both connected to sand – are temporal in nature, with limited longer-term prospects. Our cases highlight more than livelihood losses for households: the social, economic and ecological consequences of unabated sand exploitation are profound. We argue that the governance vacuum that our sand mining or infill case studies highlight will impact the type of development seen in and around Phnom Penh, the jobs people can access, and the environment in which people live. Serious sand governance is needed, particularly in conjunction with, or as part of, a more inclusive urban development strategy for Phnom Penh.
    Keywords: Cambodge
    JEL: Q
    Date: 2021–03–12
  14. By: , budana
    Abstract: Pusatnya Obat Aborsi Cytotec Asli Gresik 085713148808 Dan Jual Obat Penggugur Kandungan Janin Telat Bulan Di Kota Gresik Produk Obat Cytotec Asli Aman Sampai Tuntas, Mampu gugurkan Kehamilan Dari Usia 1,2,3,4,5,6 Hingga 7 Bulan Tanpa Harus Kuret Dan Pergi Ke Dokter. Obat Penggugur Kandungan | Jual Obat Aborsi | Obat Telat Bulan | Obat Cytotec Asli | Klinik Aborsi | Apotik Aborsi | Tempat Aborsi | Obat Penggugur Janin | Alamat Aborsi Janin Kami merupakan situs online terpercaya yang menyediakan obat aborsi penggugur kandungan asli atau biasa di sebut Obat Telat Datang Bulan yang sudah terbukti ampuh mengatasi masalah kehamilan yang tidak di inginkan. Obat Aborsi ini Terdiri dari : Gnynaecoside, Misoprostol Cytotec, Gastrul, Mifepriston. dan dilengkapi obat pendamping lain-nya yang sangat aman dan terbukti ampuh untuk menggugurkan kehamilan. Obat Aborsi jenis Cytotec merupakan salah obat aborsi atau obat pelancar haid yang hanya di perbolehkan untuk kalangan medis atau kedokteran yang di ahli di bidang nya. Obat Cytotec yang sering di gunakan para dokter pada pasien nya yang membutuhkan pertolongan secara medis,. Cytotec adalah nama merek dagang Misoprostol yang di produksi oleh PFIZER (searle) terdaftar yang di setujui oleh FDA. Cytotec Misoprostol larut dalam air atau cairan kental, tablets Cytotec Pfizer Asli berbentuk tablet putih segi enam bertulis SEARLE 1461 mengandung Misoprostol 200mcg. Cara Menggugurkan Kandungan Dengan menggunakan Obat Aborsi Cytotec Asli Obat cytotec biasaya digunakan sebagai obat penggugur kandungan. Dengan adanya obat aborsi tuntas anda bisa menghentikan kehamilan tanpa perlu dikuret atau melakukan aborsi dengan operasi. bila anda ingin tahu tips cara menggugurkan kandungan dengan obat cytotec, kamu harus memperhatikan aturan pakai cytotec ini. Di Indonesia alasan-alasan dilakukannya aborsi adalah : Tidak ingin memiliki anak karena khawatir mengganggu karir atau tanggung jawab lain (75%) Tidak memiliki cukup uang untuk merawat anak (66%) Tidak ingin memiliki anak tanpa ayah (50%) Kehamilan Karena Pemerkosaan (42%) Hamil di Luar Nikah (80%) Bagaimana Cara Kerja Obat Aborsi Cytotec ? Anda tidak boleh melakukan aborsi sendiri bila usia kehamilan sudah lebih dari 8 Bulan.Obat Misoprostol mengakibatkan kontraksi rahim. Sebab itu, rahim akan memaksakan pengguguran kehamilan. Anda akan mengalami kram yang menyakitkan, kehilangan darah dari vagina yang lebih banyak dari menstruasi biasa, rasa mual, muntah dan diare. Ada juga kemungkinan risiko pendarahan berat. Jika ini terjadi, Anda harus segera pergi ke dokter spesialist kandungan.Kemungkinan keberhasilan aborsi dengan obat Misoprostol dari 90%. Gratis Konsultasi Terlebih Dahulu Sebelum Anda Membeli Produk Kami Hubungi WA 0857 1314 8808 Alasan Anda Harus Membeli Produk Kami ? Obat cytotec misoprostol 200mcg asli yang kami jual ini sangat ampuh untuk menggugurkan kandungan yang kuat, dibandingkan dengan obat aborsi murahan yang banyak di tawarkan di internet dengan menggunakan buah-buahan. Keberhasilan dan keselamatan Anda yang kami utamakan, minumlah obat aborsi cytotec yang kami jual sesuai anjuran kami dan tolong jangan menggunakan obat aborsi atau jamu penggugur kandungan yang lainya setelah meminum obat aborsi cytotec yang kami jual ini dengan obat penggugur kandungan yang lain. Keuntungan Membeli Obat Penggugur Kandungan ( Aborsi ) Aman tanpa resiko dan efek samping Tanpa pendarahan yang berlebih lebih Langsung bersih dan bisa hamil lagi Tanpa melakukan kuret, maupun ke dokter lagi. Terimakasih Atas Kunjungan Dan Kepercayaan Anda..!!! #jualobataborsi #obatpenggugurkandungan #obattelatdatangbulan #obatcytotecasli #caramenggugurkankandungan #obatpenggugurjanin #jamutelatbulan #jualobataborsicytotecpenggugurkandungan janin085713148808
    Date: 2021–01–28
  15. By: Kauffman, Howel
    Abstract: This study seeks to empirically examine the Relation between OCB (with exterior behaviors), conflict managing, and productivity on the sample of 203 single working mothers in Vietnam and UAE. We utilized the newly proposed version of OCB theory which incorporates the “exterior” behaviors[1] .New studies proposes that the conflict occurrence management is now believed to be the better solutions of the interpersonal conflicts [2]. Following this new proposal, we collected the data on ‘’managing the conflict occurrence’’, instead of the data of traditional conflict resolution. Again, instead of collecting data in conventional way, we collected the data of micro-information two times a day (working day). We applied a range of parametric and no-parametric statistical techniques in order to investigate the relationship between them. The results indicates that OCB with exterior behavior and conflict occurrence management has significant and positive impact on the productivity. Lastly, this research proposes some Human resources management (HRM) policies for Vietnam, in order to achieve the 3P: Population, Property, and Productivity.
    Date: 2021–03–02
  16. By: International Monetary Fund
    Abstract: Selected Issues
    Date: 2021–03–02
  17. By: Niken Kusumawardhani; Rezanti Pramana; Nurmala Saputri; Daniel Suryadarma
    Abstract: Greater female labour market participation has important positive implications not only for women's empowerment and the well-being of their families but also for the economy they live in. In this paper, we examine the various effects of internet availability on women's labour market outcomes in Indonesia. As each worker subgroup tends to respond differently to changes in technology, examining the heterogeneity in the impact of internet availability on female labour market outcomes is central to our research.
    Keywords: Internet, Labour market, Indonesia, Female labour force participation
    Date: 2021
  18. By: Wahyudi, Christanto Arief; Arbay, Evi Aryati
    Abstract: The COVID-19 pandemic, which is spreading rapidly throughout the world, has seriously harmed many countries, including Indonesia. Many things have been detrimental due to COVID-19, one of which is the economic aspect. This pandemic made it difficult for many debtors to fulfil their credit obligations that led the government to issue a countercyclical policy to provide a stimulus to the national economy. This study aims to determine the impact of OJK Regulation No.48 of 2020 on credit quality and control of banking credit risk in Indonesia. The research method used is descriptive qualitative with a literature approach using secondary data. This OJK regulation regulates economic stimulus through credit restructuring and regulates the implementation of credit risk management in banks. The existence of this regulation can maintain the stability of banking performance by keeping the Non-Performing Loan (NPL) number below 5% and providing a reference for banks in risk management with a model that is relevant to economic conditions during the COVID-19 pandemic.
    Date: 2021–03–03
  19. By: Athiphat Muthitacharoen; Trongwut Burong; Athiphat Muthitacharoen
    Abstract: This paper uses a panel of personal income tax return data for the population of Thai tax filers to examine how individuals respond to tax subsidy for long-term savings. We utilize the 2013 tax reform that lowered the price subsidy for long-term savings in order to obtain causal identification. Our difference-in-difference analysis illustrates that there is a considerable heterogeneity in the individual responses to the subsidy cut—with middle-income taxpayers responding much greater than their high-income counterparts. Among the middle-income group, we also find that the subsidy reduction has larger effects on decisions of smaller contributors. Our findings shed light on the heterogeneity of individual responses which are crucial for policymakers who consider an incremental change in the existing tax incentive scheme.
    Keywords: personal income tax, tax subsidy, long-term savings, retirement savings, developing countries
    JEL: H24 H31
    Date: 2021
  20. By: Alejandro Rojas-Bernal; Mauricio Villamizar-Villegas
    Abstract: We develop a novel pricing strategy that approximates the value of an American option with exotic features through a portfolio of European options with different maturities. Among our findings, we show that: (i) our model is numerically robust in pricing plain vanilla American options; (ii) the model matches observed bids and premiums of multidimensional options that integrate Ratchet, Asian, and Barrier characteristics; and (iii) our closed-form approximation allows for an analytical solution of the option’s greeks, which characterize the sensitivity to various risk factors. Finally, we highlight that our estimation requires less than 1% of the computational time compared to other standard methods, such as Monte Carlo simulations. **** RESUMEN: En este documento proponemos una nueva metodología de valoración de opciones americanas con características exóticas mediante la valoración de un portafolio de opciones europeas con diverso vencimiento. Nuestros resultados muestran que: (i) la met odología es numéricamente robusta en la valoración de opciones americanas simples; (ii) las valoraciones del modelo corresponden a las ofertas y primas observadas en las subastas de un conjunto de opciones multidimensionales que integran elementos de opciones trinquete, asiáticas y barrera; y (iii) la forma cerrada de nuestra aproximación permite la derivación de una solución analítica para las griegas de la opción que caracterizan la exposición a diversos factores de riesgo. Finalmente, resaltamos que nuestro modelo requiere menos del 1% del tiempo de ejecución computacional comparado a otros métodos estándar como simulaciones de Monte Carlo.
    Keywords: Option pricing, exotic currency options, ratchet options, Asian options, American options, Barrier options, Weighted Time Value methodology, Least Squares Monte Carlo, valoración de opciones de divisas, opciones trinquete, opciones asiáticas, opciones barrera, ponderación del valor temporal, mínimos cuadrados de Monte Carlo
    JEL: C53 E58 G13
    Date: 2021–03
  21. By: Hetzel, Robert (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)
    Abstract: In August 2020, FOMC chair Jerome Powell announced a strategy for achieving an inclusive value of the FOMC’s goal of maximum employment. The strategy rests on discovering the minimal value of sustainable unemployment by running the economy above potential until the unemployment rate declines to a level that initiates an inflation overshoot from the FOMC’s longer-run 2 percent target. There is presumably no contradiction with an FOMC target for inflation of 2 percent. As indicated by the appellation “flexible-average-inflation targeting” (FAIT), the inflation overshoot would compensate for prior undershoots of the 2 percent target. The FOMC’s current framework is reminiscent of the 1970s. With a country fractured over the Vietnam War and a militant civil rights movement, a socially desirable low unemployment rate became a political imperative. FOMC chairman Arthur Burns accepted the challenge (Hetzel 1998, 2008, Ch. 8). The Keynesian consensus of the time promised to deliver a socially desirable rate of unemployment at least as low as 4 percent at the cost of only moderate inflation. This desirable Phillips curve trade-off between unemployment and inflation became the centerpiece of monetary policy. Modigliani and Papademos (1975 and 1976) provided the organizing principle for monetary policy. Namely, there is a predictable and “exploitable” trade-off in which changes in inflation depend upon the difference between the unemployment rate and a full-employment rate termed the nonaccelerating inflation rate of unemployment (NAIRU). At least in 2021, however, the FOMC assumption is that there is no trade-off because the Phillips curve is assumed flat at least down to its prepandemic low of 3.5%. When persistent inflation above 2% emerges, the adjective “flexible” in FAIT becomes relevant. The FOMC will then trade off between two competing goals – 2% inflation and inclusive maximum employment.
    Date: 2021–03
  22. By: Andry Alamsyah; Dian Puteri Ramadhani; Farida Titik Kristanti
    Abstract: The instability of financial system issues might trigger a bank failure, evoke spillovers, and generate contagion effects which negatively impacted the financial system, ultimately on the economy. This phenomenon is the result of the highly interconnected banking transaction. The banking transactions network is considered as a financial architecture backbone. The strong interconnectedness between banks escalates contagion disruption spreading over the banking network and trigger the entire system collapse. This far, the financial instability is generally detected using macro approach mainly the uncontrolled transaction deficits amount and unpaid foreign debt. This research proposes financial instability detection in another point of view, through the macro view where the banking network structure are explored globally and micro view where focuses on the detailed network patterns called motif. Network triadic motif patterns used as a denomination to detect financial instability. The most related network triadic motif changes related to the instability period are determined as a detector. We explore the banking network behavior under financial instability phenomenon along with the major religious event in Indonesia, Eid al-Fitr. We discover one motif pattern as the financial instability underlying detector. This research helps to support the financial system stability supervision.
    Date: 2021–03
  23. By: Eugenia C. Go (Asian Development Bank)
    Abstract: I investigate the effect of a transport program in the Philippines on domesticmaritime trade patterns. The Roll-on Roll-off Terminal System (RRTS) introduced in 2003 promotes the use of roll-on roll-off ships for interisland trade. Exploiting the variation in the availability of services between ports and the timing at which they were introduced, I find that port-pairs in RRTS trade 35% more compared to unconnected pairs with comparable characteristics. This gain largely comes from the greater variety of products traded along RRTS pairs. Transactions are 7.7% to 9.3% more frequent in RRTS routes, suggestive of inventory management as an avenue of trade costs savings. The strong responses in the extensive margin and transaction frequency highlight how the RRTS reduced the fixed cost of trade. High value and time-sensitive products systematically benefit more from the RRTS. These gains do not come from displacing trade from competing non-RRTS ports. Instead, the RRTS complements trade in liner routes by supporting feeder traffic.
    Keywords: Trade cost, transport cost, trade patterns
    JEL: F14 F63 R40
    Date: 2021–03

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