Monetary Integration in East Asia: Evidence from Real Effective Exchange Rates

This paper investigates the feasibility of forming a monetary union in East Asia by examining the cointegration and causality of the real effective exchange rates of local currencies. A “pentagon” group of five countries is found—South Korea, the Philippines, Thailand, Indonesia, and Malaysia—which may have potential for success for further monetary integration. Singapore is loosely tied to this group. The Greater China area—China, Hong Kong and Taiwan—does not show any significant degree of integration either internally or externally. Neither a yen bloc nor a US dollar bloc is forming in East Asia.     

What Determines Real Exchange Rates? The Nordic Countries

The model derived in this paper yields testable implications concerning the long‐run co‐movements of real exchange rates, relative labor productivity, the trade balance and terms of trade. Countries with relatively higher output growth, trade deficits or improved terms of trade are found to have more appreciated real exchange rates, with the main channel of transmission working through the relative price of nontraded goods. Exogenous terms‐of‐trade shocks are found to be the most important determinant of long‐run movements in the real exchange rate for Denmark and Norway, while demand shocks account for most of the long‐run variance in the real exchange rate for Finland and Sweden.     

Monetary Shocks and Real Exchange Rate Hysteresis: Evidence from the G-7 Countries

Long-run monetary neutrality specifies that nominal disturbances do not affect long-run real exchange rates. However, the "over depreciation" of the US dollar in the late 1980s, after its strong appreciation earlier in the decade, suggested to a number of observers that nominal disturbances alter long-run real exchange rates; that is, money supply shocks entail real exchange rate hysteresis. Using data from the G-7 countries and the post-1973 float, the paper measures the long-run effects of relative money supply disturbances on real US dollar exchange rates. Little evidence of hysteretic monetary policy effects is found.     

International Specialization and Labor Unions: Evidence from OECD Countries

The aim of this paper is to explore the role of the institutional determinants of international comparative advantage. Starting from a theoretically well-founded general-equilibrium framework, where specialization depends on relative factor endowments and technological differences, we study the possible additional effect of labor unions. Using country–year panel data, we obtain that they are an important determinant of relative economic performance for a sample of manufacturing sectors. In particular low wages–labor-intensive industries turn out to be relatively disadvantaged, while high wages–capital-intensive sectors are relatively advantaged by stronger labor unions. We also allow for different institutional scenarios, letting unionization patterns interact with different regimes of bargaining coordination and social security systems. Our main conclusions are not substantially altered.     

Exchange Rate Asymmetry and Flexible Exchange Rates under Inflation Targeting Regimes: Evidence from Four East and Southeast Asian Countries

While many have underscored the role of a flexible exchange rate policy under an inflation targeting (IT) regime, very few studies have examined what actually happens to exchange rate policy once the emerging market announces that it will adopt inflation targeting. The central contention of this paper is that while the adoption of an inflation targeting (IT) policy may lead to more flexible exchange rate movements, for various reasons it is possible that the degree of flexibility will be significantly higher on one side of the market. In this study, we demonstrate that four Asian economies—namely, Indonesia, Korea, the Philippines and Thailand—whom were among the first group of emerging markets to embrace the inflation targeting framework of monetary policy, tend to adopt a form of asymmetrical exchange rate behavior, wherein appreciation pressures are restrained more substantially than depreciation pressures.     

Structural Change in Current Account and Real Exchange Rate Dynamics: Evidence from the G7 Countries

Previous studies decompose the current account and the real exchange rate into temporary and permanent shocks and argue that a temporary shock creates the combination of a current account surplus (deficit) and real exchange rate depreciation (appreciation). The present paper extends their framework by examining a possible structural break in current account and real exchange rate dynamics. Using G7 country data for 1980–2007, we find structural changes in two‐variable dynamics for all G7 countries during the 1990s. Temporary shocks have not been the main source of fluctuation in the current account since the 1990s. Our empirical results imply that the conventional mechanism has played a limited role in explaining the dynamics of the two variables.     

管制与生产服务业发展的国际经验——以OECD国家为例

文章对管制影响生产服务业的理论机制进行探索性分析,运用23个OECD国家的横截面数据,实证检验了行业管制和国家管制对生产服务业的影响.研究表明:放松行业管制能有效地促进生产服务业的发展,而放松国家对产品市场的管制对生产服务业的影响不确定.中国生产服务业管制存在两个问题:一是政府具有行政审批的管制偏好导致管制的结构性供求失衡,二是政府管制边界模糊导致管制结构不合理.针对于此,文章提出完善中国现有生产服务业管制政策的建议.     

汇率、利率、税率：名义和实际

当前我国经济运行情况以及面临的问题 过去的一年里，我国经济保持了稳定增长的态势，在全球经济特别是关、日和欧三大经济体同时陷入衰退的情况下，2001年我国国内生产总值达到95800多亿元，同比增长率为7．3％。更令人感到鼓舞的是，中国在2001年加入WTO，正式成为世界贸易组织的一员，中国的对外开放进入了一个新的阶段。 但在成功数字的外表下，我们还应该看到中国经济的一些问题以及在2002年可能遇到或者已经遇到的一些难题。2001年中国经济增长前高后低，四个季度的经济增长一路滑坡，前3个季度的增长速度分别是8．1％、7．8％和7％，第4季度GDP增长也很难达到7％，11月份居民消费价格总水平比去年同月下降3％，又面临通货紧缩的威胁。2001年的经济增长，主要是由国内投资和消费需求的增长拉动的。由于国际经济严重衰退，一方面，我国出口增速下降，大约在6％左右，净出口减少，对经济增长的贡献度为负值；另一方面，促使外资流入加快，实际利用外资增长近20％，减弱了出口下降的影响。……     

Real Wage and Nominal Shock: Evidence from Pacific-Rim Countries

This paper examines aggregate real-wage responses to nominal shocks in four Pacific-rim countries utilizing a vector autoregression (VAR) framework. In this study, positive real-wage responses are found in Japan and New Zealand whereas negative responses are found in Australia and Korea. In the transmission of nominal shocks to real economic activities, the findings show a sticky-price model to be more important in Japan and New Zealand, while a sticky-wage model plays the more dominant role in Australia and Korea.An earlier version of this paper was presented at the 54th International Atlantic Economic Conference in Washington, D.C., October 10–13, 2002. The author would like to thank the conference participants and an anonymous referee for their valuable comments and suggestions. All remaining errors are attributed to the author.     

Political Leaders' Socioeconomic Background and Public Budget Deficits: Evidence from OECD Countries

This paper empirically analyzes the relationship between political leaders' socioeconomic backgrounds and public budget deficits utilizing panel data on 21 OECD countries from 1980 to 2008. Building on sociological, as well as economic research, we argue that the socioeconomic status of political decision‐makers, i.e., presidents or prime ministers, is an important determinant of fiscal budget decisions. Our theory‐consistent findings show that the tenures of lower‐class leaders – i.e., leaders of low socioeconomic status – are associated with a deficit‐to‐GDP ratio which is 1.6 percentage points higher than that during tenures of upper‐class leaders.     

Democratization and Real Exchange Rates,

In this article, we combine two so far separate strands of the economic literature and argue that democratization leads to a real exchange rate appreciation. We test this hypothesis empirically for a sample of countries observed from 1980 to 2007 by combining a difference‐in‐difference approach with propensity score matching estimators. Our empirical results reveal a strong and significant finding: democratization causes real exchange rates to appreciate. Consequently, the ongoing process of democratization observed in many parts of the world is likely to reduce exchange rate distortions.     

Income Variation and Health Expenditure: Evidence for OECD Countries

The purpose of this paper is to analyze the role health investment plays in human capital accumulation, and in so doing to demonstrate that education is not the only factor affecting the performance of the labor force and productivity. Estimates are made for the OECD countries for the period 1960–90. Investment in health contributes in a significant way to explaining variations in output through human capital, even in those countries which presumably have high levels of health.     

Productivity Trends in Europe: Implications for Real Exchange Rates, Real Interest Rates, and Inflation

The paper examines a long–run (neoclassical) framework in which differences in productivity growth across sectors and countries lead to inflation differentials. In a currency union, these inflation differentials imply cross–country differentials in real interest rates. The authors estimate the likely size of these differentials for European Union countries, discuss the potential costs of persistent inflation differentials, and comment on the conflicts they may cause within Economic and Monetary Union (EMU). The analytical framework is a variant of the Balassa–Samuelson "productivity hypotheisis," which relates sectoral productivity trends to trends in the relative price of home goods.     

Macroeconomic Volatility and the Current Account: Evidence from a Panel of OECD Countries

ABSTRACT

This paper investigates the relationship between macroeconomic volatility and the current account. Using quarterly data for a panel of OECD economies, time-varying relative volatility measures are constructed for GDP, net output, and government consumption. The empirical evidence suggests that current account balances are positively affected by all three volatility measures. Moreover, the current account balance is found to be related positively to output growth and negatively to the growth of government consumption. Evidence from saving and investment rates also suggests that the precautionary saving motive is part of (though perhaps not the entire) mechanism that relates output volatility and the current account. Broadly consistent with the predictions of the standard theoretical model, these estimates are sizable, statistically significant, and robust.     

The Effect of Changes in Real Exchange Rates on Employment: Evidence from Manufacturing Industries in China, 1980–2002

This paper analyzes the effect of changes in real exchange rate on manufacturing employment. Our theoretical model predicts the positive effect of depreciation of real exchange rate on employment through a firm’s expectation on changes in real exchange rate and the interaction between real exchange rate and a firm’s import and domestic input. Using China’s manufacturing data during the 1980–2003 period, we find that depreciation of real exchange rate promotes employment growth in manufacturing industries, while change in real exchange rate is not a significant factor in promoting wage growth. We also find that an increase in export share offsets partially the effects of real exchange rate on employment and real wages. Translated from Journal of World Economy, 2005, (4): (in Chinese)     

Productivity Shocks and Real Effective Exchange Rates

This paper provides new insights into the relationship between exchange rates and productivity developments for European Economies. We focus on the question whether productivity changes have a long‐run impact on real effective exchange rates for a large number of European economies. Focusing on a sample period running from 1995 until 2013, we adopt a cointegrated vector autoregressive approach and distinguish between long‐run equilibrium, short‐run dynamics and long‐run impact of shocks. Our findings show that for several industrialized economies, real effective exchange rates and labor productivity are not related over the long‐run. A possible explanation for this result is that wage developments do not reflect increases in labor productivity to a large degree, which prevents a transmission to the real effective exchange rate through the price channel. The results for Central and Eastern European Countries are more encouraging since a positive impact of labor productivity on real effective exchange rate is frequently observed.     

Finance–Growth Nexus and the P‐bias: Evidence from OECD Countries

Recent studies provide new empirical evidence confirming that financial development is linked to economic growth in OECD countries. Using new dynamic panel regression techniques, these appraisals indicate that within the group of high‐income countries stock market size as a measure of financial advancement contributes significantly to overall economic activity. Applying the same advanced techniques, this paper questions this conclusion by showing that the findings of these studies seem to be not only not robust with respect to adding new observations but also likely to be plagued by a severe price bias which belittles the information content of the used financial indicator (stock market capitalization). We provide evidence that anticipative price effects (i.e. expectations of future growth, reflected in current stock prices) may be driving the statistical relationship between stock market activities and economic growth in high‐income countries to a much larger extent than recent analyses of the finance– growth link in OECD countries suggest .