Asia

Empirical relationships among money, output and consumer prices in nine Muslim-majority countries

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: April–June 2014
Source:Journal of Asian Economics, Volumes 31–32

Author(s): Akhand Akhtar Hossain

This paper highlights the role of price stability in the integrity and sustainability of Islamic banking and finance (IBF) while investigating the sources of inflation and its volatility in nine Muslim-majority countries which have introduced IBF since the late 1970s. The empirical results, obtained by the Engle–Granger, Johansen and autoregressive distributed lag (ARDL) bounds tests with data extending back as far as the 1950s, suggest the presence of those cointegral and causal relations among money, output and prices that are implied by classical monetary theory. Balanced-panel results obtained by analysis of the same data-set over the shorter period 1975–2010 reinforce the results obtained for the individual countries for the varying sample periods.





Categories: Asia, Economics

Interest rate pass-through and monetary policy asymmetry: A journey into the Caucasian black box

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: April–June 2014
Source:Journal of Asian Economics, Volumes 31–32

Author(s): Rustam Jamilov , Balázs Égert

This paper analyses the interest rate pass-through for five economies of the Caucasus – Armenia, Azerbaijan, Georgia, Kazakhstan, and Russia. Employing an autoregressive distributed lag (ARDL) specification to monthly data, we find that the interest rate pass-through is systematically incomplete and sluggish, probably due to macroeconomic instability and a low degree of competition in the banking sector. It is not clear whether pass-through has improved over time and asymmetric adjustment is found to characterize the pass-through only occasionally. Overall, our results show a considerable degree of cross-country heterogeneity in the pass-through.





Categories: Asia, Economics

European crises and the Asian economies

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: April–June 2014
Source:Journal of Asian Economics, Volumes 31–32

Author(s): Richard Pomfret

This paper analyses the impact of recent financial crises in Europe on the Asian economies. What is often abbreviated to GFC included three distinct crises: the 2007–2008 North Atlantic financial crisis, a 2008–2009 global economic crisis and public finance crises which became increasingly focussed on the eurozone in 2010–2012. Asia did not experience significant financial crises, and the open economies recovered relatively rapidly from the global economic crisis. The relative weight of Asian economies in the global economy, which had been increasing for several decades, grew even more rapidly in 2009–2011 as the economies of the USA and Europe faltered. This poses challenges for global economic governance, although there are constraints on Asia being a more assertive force. Problems in the eurozone hold lessons for Asia; the euro and the Schengenzone are positive responses to the emergence of increasingly complex supply chains. In a similar context, East Asia is moving hesitantly toward financial cooperation and adopting second-best approaches, such as de facto dollar pegs, to reducing bilateral exchange rate volatility.





Categories: Asia, Economics

B.S.MisraRevisiting Regional Growth Dynamics in India in the Post Economic Reforms Period2013Palgrave MacmillanNew Yorkpp. xxi + 265, $100, ISBN: 9781137303677

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: April–June 2014
Source:Journal of Asian Economics, Volumes 31–32

Author(s): Angela Oberg







Categories: Asia, Economics

Editorial Board

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: February 2014
Source:Journal of Asian Economics, Volume 30









Categories: Asia, Economics

Low-income countries’ linkages to BRICS: Are there growth spillovers?

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: February 2014
Source:Journal of Asian Economics, Volume 30

Author(s): Issouf Samake , Yongzheng Yang

This paper employs a global vector autoregression (GVAR) model to investigate business cycle transmission from BRICS (Brazil, Russia, India, China, and South Africa) to LICs through trade, FDI, technology, and exchange rates channels. Trade and financial ties between low-income countries (LICs) and BRICS have expanded rapidly in recent years. This gives rise to the potential for growth to spill over from the latter to the former. The estimation results show that there are indeed significant direct spillovers from BRICS to LICs.





Categories: Asia, Economics

Human capital, technological progress and trade: What explains India's long run growth?

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: February 2014
Source:Journal of Asian Economics, Volume 30

Author(s): Rajabrata Banerjee , Saikat Sinha Roy

Using data for the period 1950–2010, this paper seeks to explain the importance of human capital, technological progress, and trade in determining India's long run growth. This paper uses an improved growth accounting framework and ARDL-based co-integration techniques to identify the factors that drive long run productivity growth. The results suggest that both domestic technology capability building and foreign technology spillovers are important forces in determining India's long run growth. Human capital has turned out to be the most important factor. Trade plays a facilitating role by making available frontier technology in an embodied form from the rest-of-the-world. Although the analysis does not explicitly test any endogenous growth models, our findings are consistent with the recent endogenous growth literature.





Categories: Asia, Economics

Inflation and relative price variability: Evidence for India

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: February 2014
Source:Journal of Asian Economics, Volume 30

Author(s): Sartaj Rasool Rather , S. Raja Sethu Durai , M. Ramachandran

This study decomposes relative price variability into a component due to inflation and a component due to real factors. The empirical results for India suggest that real factors account for 55% and inflation accounts for 45% of the variability in relative price changes. The proportion of inflation induced relative price variability increases with the rise in inflation, implying that inflation has distortionary effects on the structure of relative prices. Further, larger part of variability in the relative price changes seems to have been generated by fluctuations in the relative prices of a few commodities. The sector wise analysis shows that the major share of total relative price variability is contributed by fluctuations in the prices of manufactured products. The more crucial inference that emerges from the empirical analysis is that the inflation rate at which variability of relative price changes is minimum is found to be 4.5%, which is consistent with the official threshold rate often claimed by the Reserve Bank of India.





Categories: Asia, Economics

Economic consequences of war: Evidence from Sri Lanka

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: February 2014
Source:Journal of Asian Economics, Volume 30

Author(s): K. Renuka Ganegodage , Alicia N. Rambaldi

We propose a theoretical and econometric framework to evaluate the impact of war on economic growth of a developing country with an open economy. The theoretical framework encompasses both the neoclassical and endogenous growth models. We test this framework using Sri Lankan data. The war had significant and negative effects both in the short and long-run (annual average of 9% of GDP). High returns from investment in physical capital did not translate in sizable positive externalities. Only short-run significant effects of openness on growth are found. Inconsistent politically driven policies towards openness are the likely reason.





Categories: Asia, Economics

Financial literacy and remittance behavior of skilled and unskilled immigrant groups in Australia

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: February 2014
Source:Journal of Asian Economics, Volume 30

Author(s): Wasana Karunarathne , John Gibson

Studies of financial literacy show that many people are poorly prepared for making major financial decisions. One important sub-group rarely examined by financial literacy studies is immigrants, who have specialized financial needs related to remittances. This paper examines variation in financial literacy amongst two actively remitting immigrant groups in Australia – Sri Lankans and Samoans – using surveys designed and supervised by the authors. Paying attention to remittance-related and credit-related literacy, large gaps in the level of financial literacy of the two groups are shown, which are due especially to differences in educational attainment. The wide variation in transactions costs of various remittance channels suggest that many immigrants could save several hundred dollars per year if improved financial literacy helped to produce more efficient remittance choices.





Categories: Asia, Economics

Monetary regime choice in Singapore: Would a Taylor rule outperform exchange-rate management?

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: February 2014
Source:Journal of Asian Economics, Volume 30

Author(s): Hwee Kwan Chow , G.C. Lim , Paul D. McNelis

A DSGE–VAR approach was adopted to examine the managed exchange-rate system at work in Singapore and to ask if the country had any reason to fear floating the exchange rate and adopting a Taylor rule. The results showed that, in terms of overall inflation volatility, the exchange rate rule had a comparative advantage over the Taylor rule when export-price shocks were the major sources of real volatility while a Taylor rule was preferable when domestic productivity shocks were dominant. The exchange-rate rule also dominated the Taylor rule for reducing inflation persistence.





Categories: Asia, Economics

Editorial Board

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: December 2013
Source:Journal of Asian Economics, Volume 29









Categories: Asia, Economics

A note on detecting biases in assessing the use of FTAs

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: December 2013
Source:Journal of Asian Economics, Volume 29

Author(s): Shintaro Hamanaka

There has been much confusion, rather than debate, on the use of free trade agreements (FTAs). Unfortunately, a large part of the confusion is caused by the absence of consensus on the meaning of key terms such as the “utilization rate” and “usage rate” of FTAs, and the lack of knowledge on upward or downward biases from various data sources regarding the use of FTAs. Rather than making an original empirical contribution, this article reviews existing studies and attempts to identify the relevant methodologies for assessing the use of FTAs.





Categories: Asia, Economics

Regional disparity, transitional dynamics and convergence in China

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: December 2013
Source:Journal of Asian Economics, Volume 29

Author(s): Tsun Se Cheong , Yanrui Wu

Most of the earlier studies on the convergence of income in China are based on provincial level data with a few papers focusing on intra-provincial units’ transitional dynamics. The objective of this study is to fill the void in the literature by using county-level data which cover 1485 counties and county-level cities in 22 provinces for the period of 1997–2007. This paper makes several contributions to the literature. The findings in this paper show high persistence in income distribution among many spatial groupings. Thus the poor county-level units may remain relatively poor over time. This study provides very little evidence of convergence to the mean income in various spatial groupings. Furthermore, the empirical analysis highlights differences in transitional dynamics between cities and counties.





Categories: Asia, Economics

Trade liberalisation and manufacturing wage premiums: Evidence from Thailand

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: December 2013
Source:Journal of Asian Economics, Volume 29

Author(s): Kankesu Jayanthakumaran , Piyapong Sangkaew , Martin O’Brien

This paper investigates trade related industrial wage premiums. The procedure involves (1) estimating industrial wage premiums and (2) linking those estimated wage premiums to trade related variables. Results reveal that (1) in addition to workers’ characteristics, industry characteristics where workers are employed were important in determining the wages for workers, (2) falling output tariffs resulted in increased wage premiums, and (3) an increase in intermediate imports exerted a strong positive influence on wage premiums. Linked employer and employee micro data may provide further insights which are currently not available.





Categories: Asia, Economics

An empirical analysis of China's equilibrium exchange rate: A co-integration approach

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: December 2013
Source:Journal of Asian Economics, Volume 29

Author(s): Christopher Gan , Bert Ward , Su Ting Ting , David A. Cohen

This paper estimates time specific values for China's long-run equilibrium exchange rate and develops measures of the direction and extent of misalignment based on a reduced-form real effective exchange rate (REER) model. An appropriately specified long-run equilibrium model is estimated and tested following Johansen and Juselius (1990) procedures, which is then used to construct an estimated time path for long-run equilibrium exchange rate values. Unit root tests indicated that each series can be considered as I(1) and that there was one cointegrating relationship linking the RMB series with its “fundamentals” – openness, money supply, productivity and government spending – with long-run elasticities of (0.41), (0.97), (0.51) and (0.75), respectively. The estimated error-correction model of REER determination showed that during China's latest exchange rate regime (from 2005:Q3) the RMB was undervalued by an average of 6.7 percent, which is modest compared to related studies. Estimation of the associated short-run error correction model shows that the error correction term has a statistically significant value of 0.85, implying that the actual real effective exchange rates would converge relatively quickly (just over one quarter, on average) towards their long-run equilibrium level in the absence of central bank intervention.





Categories: Asia, Economics

Can Asia sustain an export-led growth strategy in the aftermath of the global crisis? Exploring a neglected aspect

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: December 2013
Source:Journal of Asian Economics, Volume 29

Author(s): Gonzalo Hernandez Jimenez , Arslan Razmi

Employing panel data for Asian countries to distinguish between different kinds of export- and tradable-led growth, we find that the proportion of a country's manufactured exports that is destined for industrialized countries, a variable largely ignored by existing studies, is robustly associated with growth. This finding has crucial implications given the expected deceleration of industrialized country import growth in the coming years. Most importantly, and contrary to some recent studies, prospects for continued growth, now centered on domestic tradable consumption or on developing countries as markets, may be limited. South–South trade may not be a good substitute for South–North trade.





Categories: Asia, Economics

Sources of spatial welfare disparities in Indonesia: Household endowments or returns?

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: December 2013
Source:Journal of Asian Economics, Volume 29

Author(s): Emmanuel Skoufias , Sergio Olivieri

This article investigates (i) the extent to which the differences in the standard of living among districts in Indonesia are due to differences in the marginal welfare gains (returns) associated with household mobile endowments or differences in household endowments themselves; and (ii) whether the current allocation of fiscal expenditures by the central authorities is related to the main determinants of the spatial disparities in welfare among districts. Differences in the returns to household mobile characteristics are found to be the primary explanation of the welfare differences. The allocation of fiscal transfers to districts is found to be based on “needs” defined as low returns to household mobile endowments. This also suggests that the design of the fiscal transfer system is consistent with promoting the opportunities for welfare across districts as opposed to equalizing the level of welfare itself. Finally, the marginal welfare gains of most household mobile endowments are found to be higher in districts with more roads.





Categories: Asia, Economics

The determinants of Australian household debt: A macro level study

Journal of Asian Economics - Fri, 08/22/2014 - 23:32
Publication date: December 2013
Source:Journal of Asian Economics, Volume 29

Author(s): Xianming Meng , Nam T. Hoang , Mahinda Siriwardana

This paper employs a cointegrated Vector Autoregression (CVAR) model to explore the determinants of Australian household debt. The results show that housing prices, GDP and the population in the economy have a positive effect on household borrowing. Meanwhile, interest rates, the unemployment rate, the number of new dwellings and inflation are found to have a negative effect on Australian household debt. Of these, interest rates are the most significant. Based on these results, it is judicious to rein in household debt during economic booms through monitoring and intervening in the assets market and using monetary policy in a timely, comprehensive, and careful manner.





Categories: Asia, Economics
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