An empirical analysis of China's aggregate import demand function

This study uses the cointegration concept to analyze the long-run relationship of China's aggregate import demand function for the period 1970–1999. The conventional specification for the import demand function reveals that the volume of imports demanded responds to domestic activity and relative prices. This study considers four definitions of domestic activity, namely gross domestic product (GDP), GDP minus exports [IMF Staff Pap. 45 (1998) 236], “national cash flow” [Econ. Lett. 74 (2002) 265], and final expenditure components [Appl. Econ. 21 (1989) 957]. The empirical results indicate a long-run equilibrium relationship between these measures of domestic activity and China's import demand. Overall, domestic activity and relative prices are inelastic in the long run. This study also highlights some policy implications.     

Exchange rate pass-through in Korea and Thailand: Trends and determinants

An important but age-old transmission channel of global factors into domestic prices is via exchange rate movements. This paper examines the extent and evolution of exchange rate pass-through (ERPT) into Korea's and Thailand's consumer and import prices at the aggregate level for the period over the last two decades. We find that ERPT appears to be consistently higher for Thailand compared to Korea; while for both nations ERPT of their respective bilateral rates with respect to the US dollar is higher than with respect to the Japanese yen. The paper also investigates if and how ERPT has changed over time, especially during and after the currency crisis period of 1997–1998, as well as its macroeconomic determinants.     

Terrorism and crisis management: The Rangoon bombing incident of 1983

The Rangoon bombing incident represents one of the major crisis events for examination if one is to understand the process of crisis management of Chun Doo Hwan's government within the context of the ROK‐U.S. Combined Forces Command. Moreover, the Rangoon bombing was the first grave terrorist act on the international scene, and North Korea's involvement was not immediately revealed. This case clearly illustrated how South Korea's resolve in restraining punitive military action against North Korea could resolve a crisis without escalating it, and facilitate a favourable outcome. Indeed, in order to protect or to minimize the damage to its interests and without triggering an unwanted escalation of crisis, South Korea made vigorous efforts to pressure North Korea into softening its belligerent stance through the use of diplomatic sanctions.     

中国国防支出对经济贸易影响的实证研究

中国在一体化经济和军民融合的新时代背景下,研究国防支出对经济贸易的影响机制具有重要价值。通过对中国近三十年来国防支出对国内生产总值和对外进出口贸易的影响进行实证研究可以发现：中国的国防支出可以促进经济增长,而对外贸易能够促进国防支出增加且对外进口贸易对其影响增幅较大。同时,根据研究结论提出中国要稳步增加国防支出、优化出口贸易结构、加大产业科研投入、推动区域协调发展的政策建议。     

SOUTH AFRICA'S POST‐LIBERALISED CAPITAL FLOWS AND BUSINESS CYCLE FLUCTUATIONS

This study used Christiano and Fitzgerald filtered correlation analysis to investigate the cyclical relationships between South Africa's post‐liberalised capital flows and domestic business cycle fluctuations. The results show that foreign direct investment inflows are counter‐cyclical and proactive, while the “hot” inflows are acyclical. Thus, South Africa's post‐liberalisation “hot” inflows have not been significantly associated with domestic business cycle fluctuations. In contrast, the capital outflows are found to be consistently procyclical and proactive, suggesting that the outflows are more significantly associated with domestic business cycle fluctuations than the capital inflows. In addition, it is found that the cyclical relationships between the capital inflows and the business cycle components of exports, household consumption and gross fixed investment are generally procyclical, except for portfolio inflows, which have a counter‐cyclical relationship with fixed investment. In contrast, the capital outflows are counter‐cyclically associated with exports and household consumption, and procyclically associated with fixed investment.     

Effects of China's Structural Change on the Exports of East Asian Economies

The Chinese economy is slowing down and is in the midst of a structural transformation from export‐led and investment‐led growth to domestic demand‐led and consumption‐led growth. While there are widespread concerns among China's trading partners about the effect of the slowdown in China's growth on their exports, China's structural changes are also likely to have a significant impact: for example, China will import fewer machines and more cosmetics. The central objective of the present paper is to empirically examine the effect of China's structural transformation on the exports of East Asian economies, which have close trade linkages with China. We find that economies that have failed to increase the share of consumption goods in their exports to China have suffered larger declines in their quantities of exports to China. In addition, economies that have suffered losses in their shares of China's parts and components imports have faced reductions in their shares in China's total imports.     

China＇s Penetration of the Korean Market： Stylized Facts and Welfare Effect

China＇s penetration of the world market has been impressive. This paper uses highly disaggregated Korean import data （from 1992 to 2008） to examine China ＇s penetration of the Korean market in the context of the composition of value （the extensive and intensive margins） and the product type （homogeneous and differentiated） in trade. The increase in Chinese imports has been attributed to the rapid increase in the import of new products （the extensive margin） and of existing products （the intensive margin）. However, the growth rate of new products decelerated in the 2000s. The growth in the intensive margin was due to quantity, not price. Chinese imports to Korea did not improve over the period in terms of quality. Although Chinese products became cheaper, they were more differentiated over time. Welfare gains were realized through the expanded introduction of new products from China. However, much of the gains from Korea＇s Chinese product import boom were realized in earlier years （1992 -2000） because even though imported products became more differentiated, the increase in the extensive margin was lower in more recent years （2001- 2008）.     

Trade and the structure of South African production, 1984-97

With the onset of trade liberalisation, fears have been raised concerning the impact of trade on manufacturing output, employment and growth. Using an input–output methodology, this article decomposes South African output growth between 1984 and 1997 into final demand expansion, trade flows and technology. There are two main findings. First, trade liberalisation has not deindustrialised the manufacturing sector. Although import penetration has risen, export growth has matched and exceeded the potential import-induced losses in domestic production. South Africa's response thus conforms closely to international evidence. Secondly, a combination of strong growth in capital-intensive exports and import penetration in ultra-labour-intensive sectors has aided the structural shift in production towards capital-intensive sectors. However, capital-biased supply-side policies, as well as endemic problems within ultra-labour-intensive sectors, suggest that domestic factors and not trade liberalisation lie behind this shift.     

An Alternative Business Cycle Dating Procedure for South Africa

This paper applies a factor‐augmented Markov‐switching model to the South African economy to provide an alternative classification of the business cycle and its turning points. In the principal components step, 123 variables are used to establish the aggregate cyclicality in all sectors of the economy with the number of factors chosen using a modified Bai and Ng method. By exploiting the rich nature of the dataset, we provide a model with well‐defined statistical properties that compares favourably with the South African Reserve Bank (SARB) dating points. Combining the results of the parametric approach followed in the Markov‐switching model and the non‐parametric approach followed by the SARB should allow for a robust turning point analysis. A Markov‐switching model of real gross domestic product is also estimated because this variable is commonly used in the literature and provides a benchmark for the factor models.     

China＇s Share of US Imports and Exchange Rate Pass-through to US Import Prices

The present paper investigates the effect of China's share of US imports on the aggregate‐level exchange rate pass‐through to US import prices over the period from January 1999 to December 2008. The paper also focuses on the post‐reform period, after 2005, allowing greater flexibility of the RMB to explore the change in the role of the Chinese import share in determining the trend in the US exchange rate pass‐through. Evidence reveals that China's share of US imports has a negative effect on the exchange rate pass‐through. However, this negative effect has been moderated to a negligible level since China's exchange rate reform. An important implication is that the exchange rate flexibility of the RMB has been raised to a significant level may no longer cause distortion in the US competitive environment and prevent the USA from adjusting current accounts.     

Renminbi in Ordinary Economies: A Demand‐side Study of Currency Globalization

Most studies of renminbi internationalization focus on the supply side, by examining China's own economic and political conditions. In contrast, this study addresses the demand side of renminbi internationalization, by providing an in‐depth analysis of renminbi use in ordinary foreign economies from both economic and political perspectives, with a particular focus on South Korea, China's next‐door neighbor. The study finds that sustainable indigenous market forces facilitating renminbi use in South Korea remain weak, despite the country's close economic ties with China. This research also shows, however, that the Korean Government has itself recently been able, through its policy measures, to generate new domestic support for greater use of the renminbi. These findings ultimately highlight the significant impact on the internationalization of a currency of the politics in the foreign countries using it.     

A review of trade trends: South Africa and the Indian Ocean Rim

Since 1990, intense diplomatic efforts have taken place to secure and negotiate trade treaties with South Africa's traditional trading partners (the European Union, in particular) and those countries in close geographic proximity. This article examines South Africa's trade links with some of its ‘non‐traditional’ trading partners, in particular the countries of the Indian Ocean Rim (IOR), in an attempt to ascertain the nature of the trade and its importance vis‐a‐vis the rest of the world. An examination of trade data for the years 1992‐5 indicates that trade with the IOR consists mainly of the mutual exchange of natural resource products and that this trade is growing much faster than South Africa ‘s trade in general. Given this trade dynamism, South Africa should pay increasing attention to international relations with these countries. South African trade with the Rim was also found to differ from trade with the rest of the world in that it comprises the mutual exchange of natural resource‐based products. This research shows that our imports and exports are positively related to the gross domestic product of our trading partners, and negatively related to their population size and distance from South Africa. Also, more open economies have absorbed more exports from South Africa. There is some ambiguity as to the role that distance plays in determining the level of imports into this country. The intensity indices computed in this article have to be viewed in the light of this research.     

AN ANALYSIS OF ECONOMIC INFRASTRUCTURE INVESTMENT IN SOUTH AFRICA

This paper analyses long‐term trends in the development of South Africa's economic infrastructure and discusses their relationship with the country's long‐term economic growth. A database covering national accounts data, railways, roads, ports, air travel, phone lines and electricity was established for this purpose, and may facilitate further quantitative research. PSS (Pesaran, Shin and Smith, 1996, 2001) F‐tests are used to identify directions of association between economic infrastructure and economic growth. These indicate long‐run forcing relationships from public‐sector economic infrastructure investment and fixed capital stock to gross domestic product (GDP), from roads to GDP, and from GDP to a range of other types of infrastructure. There is also evidence of potential simultaneity between specific types of infrastructure and GDP. The evidence suggests three main findings. Firstly, the relationship between economic infrastructure and economic growth appears to run in both directions. Inadequate investment in infrastructure could create bottlenecks, and opportunities for promoting economic growth could be missed. Secondly, South Africa's stock of economic infrastructure has developed in phases. Policymakers should focus on choosing or encouraging the right type of infrastructure at the right time. Thirdly, the need for investment in economic infrastructure never goes away. The maintenance and expansion of infrastructure are important dimensions of supporting economic activity in a growing economy, provided that individual projects are chosen on the basis of appropriate cost‐benefit analyses.     

The great divergence on the Korean peninsula (1910–2020)

Before the 1960s, North Korea's GDP per capita was 30%–50% higher than South Korea's due to industrialisation during the 1930s. However, the governments of the two Koreas pursued different goals in the 1960s, which resulted in a reversal. The South Korean government made economic growth its ultimate goal. They did this by self-implementing, adjusting and instituting an export-oriented development strategy. On the other hand, the North Korean government tried to maximise its ability to survive by sacrificing gains from economies of scale. These differences brought about remarkable differences in economic performance. The gap between the two economies has continued to grow since the income level reversal in the 1970s.     

Intranational Consumption Risk Sharing in South Korea: 2000–2016

This paper examines consumption risk sharing among 16 regions in South Korea over the 2000–2016 period. The empirical results show that 91.8 percent of shocks to gross regional domestic product are smoothed in South Korea. Capital markets, the tax‐transfer system and credit markets absorb 29.9, 28.9 and 33.0 percent of shocks to gross regional domestic product, respectively. Most notably, South Korea relies more on credit markets for risk sharing than capital markets, an opposite pattern to advanced countries like the USA, Canada and Australia. Furthermore, the patterns of consumption risk sharing are different before and after the 2007–2008 global financial crisis, and differences in regional industrial structure and local development can influence these patterns. This paper attempts to infer the connection between these findings and both the rapid economic growth of South Korea and the Asian and global financial crises.     

Nowcasting South African gross domestic product using a suite of statistical models

Given lags in the release of data, a central bank must ‘nowcast’ current gross domestic product (GDP) using available quarterly or higher frequency data to understand the current state of economic activity. This paper uses various statistical modelling techniques to draw on a large number of series to nowcast South African GDP. We also show that GDP volatility has increased markedly over the last 5 years, making GDP forecasting more difficult. We show that all the models developed, as well as the Reserve Bank's official forecasts, have tended to overestimate GDP growth over this period. However, several of the statistical nowcasting models we present in this paper provide competitive nowcasts relative to the official Reserve Bank and market analysts' nowcasts.     

Chinese Regions in the Great Divergence: Provincial Gross Domestic Product per Capita, 1873–1918

We construct 1912/18 Chinese provincial gross domestic product per capita from primary sources and project cross‐sections for 1873 and 1893. The results fit the historical record. We hypothesise that regionally specific conflicts have a role to play in explaining differential growth rates, and that geography, governance, and sectoral structures explain relative income‐level rankings. China's richest provinces matched Europe's poorest. A divergence did indeed occur, but our estimates show that at a broader economic level, it was perhaps not as dramatic as some of the literature implies.     

AN ANALYSIS OF INVENTORY INVESTMENT IN SOUTH AFRICA

This paper describes the evolution of inventory investment in South Africa over the past two decades, and identifies the factors influencing inventory investment over this period. An econometric model of inventory investment in South Africa, based on the production smoothing approach, is constructed. The results of the model indicate that actual sales, production, unfilled orders, price levels, interest rates and expected sales have an influence on the evolution of inventory investment. These variables are directly or indirectly influenced by macroeconomic policy decisions and through their influence on inventory investment they also influence changes in gross domestic product. Therefore, prior information on the factors that influence inventory investment contributes to explaining changes in gross domestic product and may help to prepare more accurate short‐term forecasts of overall economic activity.     

Exchange rate volatility and agricultural trade under policy reforms in South Africa

Decades of government intervention have helped develop the South African agriculture sector to its present state. Policy reforms have included trade and exchange rate policies to increase the country's international competitiveness, reduce poverty and promote economic growth. These reforms are facilitating the growth in agricultural trade and South Africa's reintegration into the global economy. Annual agricultural exports and imports have increased. This paper uses annual data and a vector error-correction model to investigate the supply and demand relationships for agricultural trade flows in South Africa during the past four decades. The results show that prices, real exchange rates, domestic production capacity and real incomes have significant impacts on the country's agricultural trade. In particular, exchange rate volatility has negative impacts. This cannot be viewed solely as an exogenous source of macroeconomic instability in South Africa, as domestic policies play a crucial role in influencing the movement of exchange rates.     

Stock Market Development and Economic Growth: Evidence from Côte D'Ivoire

Abstract: The present paper investigates the relationship between the development of the Ivorian stock market and the country's economic performance. Stock market development indicators were identified and used to calculate the Ivorian stock market development index. A set of control variables were also identified. The empirical results suggest that gross domestic product and stock market development are cointegrated when the control variables are included in the analysis. That is, there is a long‐run relationship between these variables taken together. Moreover, there is a unidirectional causality running from stock market development to economic growth.