The US Dollar and the Euro as International Currencies

For many decades the US dollar has remained unchallenged as the world’s dominant international currency. What is behind its persistent pre-eminence in the international monetary system and can this be expected to last? Could the euro rival or even surpass the dollar as the leading currency? If it did, what would be the consequences for Euroland?      

Impact of Terrorism on Cross-Border Mergers and Acquisitions (M&As): Prevalence,Frequency and Intensity

This paper contributes to the literature on the impact of terrorism on international business by focusing on the specific case of cross-border mergers and acquisitions (M&As) using bilateral data for 59 countries over the period 2000–2011. We are interested in the following set of questions: (a) the impact of source and host country terrorism on bilateral M&A flows using various measures of terrorism (i.e. prevalence, frequency and intensity); (b) whether terrorism affects developing countries differently; (c) whether good institutions in developing host countries can offset the negative effects of terrorism; and (d) whether terrorism incidents in a particular economy has negative spillovers to its neighbors. To preview the main conclusions, we find that an augmented gravity model fits the data well. While the occurrence of terrorism in either the host or source does not appear to have any impact on bilateral M&A, the frequency and intensity of terrorist attacks significantly deter M&A flows, especially in the latter. We also find that good institutions negate the impact of terrorist attacks in the developing host country. There is also some evidence that regional spillovers reduce M&As in the host country.     

Singapore's Bilateral Merchandise Trade Linkages with Japan and the United States: Trends,Patterns and Comparisons*

This paper analyses and compares trends and patterns in Singapore's bilateral merchandise trade relations with its two largest trading partners, Japan and the United States (US). Over the period 1976–1992, the analyses reveal that both Japan and the US have been relatively over-represented as Singapore's trade partners. However, whereas Singapore's trade with Japan has become more intensive in recent years, that with the US has become less so. Computations reveal that the degree as well as level of Singapore's intra-industry trade with the US has exceeded that with Japan. Nevertheless, while the degree of Singapore's intra-industry trade with Japan has been consistently increasing since 1981, bilateral trade with the US since 1987 has become increasingly inter- rather than intra-industry. The important nexus between trade and FDI is also highlighted.     

Exchange rate policies in Asia in an era of financial globalisation: An empirical assessment

Ebbs and flows of capital have complicated macroeconomic policy management for all emerging market and developing economies (EMDEs) regardless of whether they have adopted flexible or managed exchange rate regimes. In the light of the renewed interest in the trilemma versus dilemma debate, we contribute to the related literature by presenting an empirical analysis of exchange rate flexibility and intervention for selected Asian EMDEs over the time period 2001–2016. In addition to estimating augmented Frankel–Wei regressions, we employ a generalised auto‐regressive conditional heteroscedasticity (GARCH) model to assess the extent of foreign exchange (FX) intervention and whether there exist any asymmetries in the way countries intervene. Our results show that although there is greater flexibility in exchange rates, there is evidence of some countries potentially using FX intervention to manage currency movements. We also find evidence of asymmetry in intervention where exchange rate volatility responds more emphatically to FX sales than purchases.     

Exploring the Case for Monetary Integration between the Chinese Mainland and Hong Kong

This paper presents an empirical investigation on an important policy issue, namely, whether there is any evidence supporting monetary integration between the Chinese mainland and Hong Kong. We follow two lines of inquiry. First, we present a series of simple tests to find the extent to which trade and/or financial linkages exist between the two regions. Second, we use simple inflation and output differentials and structural VAR techniques to test for the degree of business cycle synchronization between the two regions. The results indicate that there is evidence supporting the existence of trade linkages and that there is also support for the possible synchronization of business cycles. We discuss the implications of this for monetary integration between Hong Kong and the mainland.     

Capital Inflows Problem in Selected Asian Economies in the 1990s Revisited: The Role of Monetary Sterilization*

This paper develops a simple model to examine the reasons behind the capital inflow surges into selected Asian economies in the 1990s prior to the financial crisis of 1997–98. The analytical model shows that persistent uncovered interest differentials and consequent capital inflows may be a result of complete monetary sterilization, perfect capital mobility, sluggish response of interest rates to domestic monetary disequilibrium, or some combination of all three. Using the model as an organizing framework, the paper undertakes a series of related simple empirical tests of the dynamic links between international capital flows, the extent to which they are sterilized and uncovered interest rate differentials in the five crisis‐hit economies (Indonesia, Korea, Malaysia, the Philippines and Thailand) over the period 1990:1–1997:5.     

Singapore’s Bilateral Merchandise Trade Linkages with Japan and the United States: Trends,Patterns and Comparisons

This paper analyses and compares trends and patterns in Singapore’s bilateral merchandise trade relations with its two largest trading partners, Japan and the United States (US). Over the period 1976-1992, the analyses reveal that both Japan and the US have been relatively over-represented as Singapore’s trade partners. However, whereas Singapore’s trade with Japan has become more intensive in recent years, that with the US has become less so. Computations reveal that the degree as well as level of Singapore’s intra-industry trade with the US has exceeded that with Japan. Nevertheless, while the degree of Singapore’s intra-industry trade with Japan has been consistently increasing since 1981, bilateral trade with the US since 1987 has become increasingly inter- rather than intra-industry. The important nexus between trade and FDI is also highlighted.