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on Transition Economics |
| By: | Balazs Egert; Amina Lahreche-Revil; Kirsten Lommatzsch |
| Abstract: | This paper investigates the determinants of equilibrium real exchange rates for the new EU member states and candidate countries, relying on an asset model inspired by Aglietta et al. (1998) and Alberola et al. (1999, 2002). The impact of productivity gains on both the Balassa-Samuelson effect and the behaviour of the tradable real exchange rate is especially assessed. Subdividing the panel into sub-panels, we show that the B-S effect is a common feature to all economies, but that the tradable price-based real appreciation is a distinct feature of transition and emerging economies. We also show that in transition countries, a decrease in net foreign assets leads to an appreciation of the real exchange rate, instead of the depreciation predicted by theory. Comparing in-sample and out-of-sample estimates (in terms of the country coverage) of equilibrium exchange rates shows that these measures can yield different results, and could therefore be considered as complementary tools in judging misalignments. |
| Keywords: | real equilibrium exchange rate; EU enlargement; Balassa-Samuelson effect; productivity; net foreign assets; out-of sample panel |
| JEL: | C15 E31 F31 O11 P17 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2004-15&r=tra |
| By: | Jianping Mei; Jose Scheinkman; Wei Xiong |
| Date: | 2005–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levrem:122247000000000867&r=tra |
| By: | M. Ulric Killion (Shanghai International Studies University) |
| Abstract: | The issue presented is whether praxis of Chinese regionalism poses threat to multilateral trade. It is a question directly related to the recent 2004 ASEAN-China accord, which proposes to establish the world largest free trade area (FTA). Assuming regionalism promoted by exclusionary motivations, such as, political considerations, in entirety or in part, they tend to produce trade distortion, and is welfare reducing. An exclusionary trading area of such magnitude may pose a threat to multilateral trade. In such an event, trade distortion may result in great harm to the global economy, producing disastrous economic and social consequences worldwide. This article examines the issue of the consequences that may flow from the recent 2004 ASEAN-China accord, and the tangential issues of Chinese praxis of regionalism, trade distortion versus trade creation, and finally, whether the 2004 ASEAN-China accord threatens the WTO and multilateral trade. |
| Keywords: | China, regionalism, multilaterl trade, WTO, 2004 ASEAN-China accord, FTAs, trade diversion, trade creation, welfare-reducing |
| JEL: | F1 F2 |
| Date: | 2005–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0501003&r=tra |
| By: | Kirby Adam J.R. Faciane (Kirby Faciane / KAJR Faciane) |
| Abstract: | This paper sketches the general picture of foreign direct investment (FDI) flows to European transition economies during the 1990s. In reviewing trends, we shall highlight the experience of Hungary and Poland relative to other transition economies over the decade. In a third section, we shall look more closely at the qualitative factors that seem to explain relative success in the two cases, looking first at Hungary, where the experience is richer, and then more briefly at Poland. We shall then undertake a quantitative analysis of the causal factors in the case of the two countries relative to others in the CEE region. Finally, we shall attempt to draw some implications of the FDI experience of the two leading countries for the prospects of others in the second transitional decade. |
| Keywords: | international investment and capital budgeting; European transition economies; |
| JEL: | E E0 F1 F2 F3 O |
| Date: | 2005–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0501004&r=tra |
| By: | Kirby Adam J.R. Faciane (Kirby Faciane / KAJR Faciane) |
| Abstract: | The purpose of this analysis is to determine whether Poland’s integration with the world economy has kept pace with the general rate of globalization during the last decade and where it currently stands. Investigation is confined to two dimensions of such integration - world trade and foreign direct investment. These two dimensions are of critical importance as far as Poland’s participation in the global economy is concerned. In a wider context, the role of foreign capital and the country’s share in international trade have always been the key development issues for all the transition economies of Central and Eastern Europe (CEE). The analysis first focuses on the evolution of world trade over the decade of 1990 - 2000. Then, Poland’s share in world trade over the same period is assessed, using both per capita and total trade volume data, as well as trade to GDP ratios. Thereafter, the analysis moves to foreign direct investment. FDI trends are investigated in the context of different country groups and Poland itself. One of the analytical instruments used in that context is the transnationality index developed by UNCTAD. The subsequent section investigates Poland’s external equilibrium. Economic policy implications stemming from the observed trends in foreign trade and FDI constitute the last section of the paper. |
| Keywords: | Poland; international investment and capital budgeting; European integration |
| JEL: | E E0 F1 F2 O |
| Date: | 2005–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0501006&r=tra |
| By: | Kirby Adam J.R. Faciane (Kirby Faciane / KAJR Faciane) |
| Abstract: | Theoretically, FDI and international trade can be regarded as substitutes or complements. This paper examines the relationships between the inflows of foreign direct investment (FDI) into Ukraine, as well as the level of imports to and exports from the country. Empirically, the paper reveals that FDI from the European Union (EU) into Ukraine in extractive industries is mostly export-oriented and consequently complements trade, whereas FDI into manufacturing industries tends to substitute for imports. It is argued that primary- industry FDI from the EU is motivated by Ukraine’s comparatively abundant and cheap natural resources, whereas secondary-industry FDI is motivated by cost factors in Ukraine such as low labor cost and on the revenue side by its large and relatively untapped substitution, although tests of this hypothesis at aggregate levels were inconclusive. |
| Keywords: | European Union; investment; capital budgeting; Ukraine |
| JEL: | E E0 F1 F2 O |
| Date: | 2005–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0501019&r=tra |
| By: | F. Gerard Adams (Department of Economics, Northeastern University); Byron Gangnes (Department of Economics, University of Hawaii at Manoa); Yochanan Shachmurove (City University of New York) |
| Abstract: | This paper evaluates factors responsible for the competitiveness of China in the world economy and relative to its East Asian rivals. China has been highly successful in capturing world export markets. Chinese competitiveness is not just a matter of an undervalued exchange and extremely low labor costs. It reflects primarily the coincidence of favorable cost conditions with improvements in China’s ability to produce products that meet world market specifications. These improvements are closely related to foreign participation in China’s economy through foreign direct investment and joint venture enterprises. |
| Keywords: | China exports, comparative advantage, competitiveness, purchasing power parity, exchange rate, undervaluation, international comparisons, foreign direct investment, joint ventures |
| JEL: | D9 Q3 Q4 |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:200406&r=tra |
| By: | Michael G. Plummer (Johns Hopkins University SAIS-Bologna); Chung H. Lee (Department of Economics, University of Hawaii at Manoa) |
| Keywords: | Economic development in China, East Asia, trade adjustment |
| JEL: | F1 F2 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:200411&r=tra |
| By: | Chung H. Lee (Department of Economics, University of Hawaii at Manoa) |
| Abstract: | In the aftermath of the economic crisis of 1997-98 South Korea has undertaken a number of major institutional reforms. What are these reforms? Why were they undertaken? What is the outcome of the reforms? In answering these questions the paper examines the influence that the ideas of political leaders on political economy had in setting forth the reform agenda and the role that various interest groups have played in implementing the reform. It argues that there was a shift in the developmental paradigm in the early 1980s, that the new paradigm guided reforms in Korea during the 1980s and 1990s but with initial conditions and interest politics influencing the implementation and actual outcome of reform, and that the post-crisis reform was a culmination of the reform process that began in the early 1980s. |
| Keywords: | Korea, Institutional Reform, Asian Financial Crisis. |
| JEL: | O5 P1 G1 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:200412&r=tra |