The Suitability of ASEAN for a Regional Currency Arrangement

This paper examines the costs, benefits, preconditions, and implications of an Association of Southeast Asian Nations (ASEAN) regional currency arrangement that is assumed to culminate in a regional currency. On economic criteria, ASEAN appears less suited for a regional currency arrangement than Europe before the Maastricht Treaty, although the difference is not large. The transition to European Monetary Union (EMU) indicates that the path toward a common currency is fraught with difficulty. A firm political commitment would seem to be vital to ensuring that an attempt to form a regional currency arrangement is not viewed as simply another fixed exchange rate regime, open to speculative crises.     

Does the financial cooperation agreement increase the interdependency among ASEAN+3 equity markets? A Markov switching approach

International Economics and Economic Policy - This paper aims to investigate the degree of interdependence among ASEAN+3 equity markets by employing Markov Switching approach and Johansen...     

Whether crop diversification is a desired strategy for agricultural growth in Bangladesh?

This study aimed at examining the merit of crop diversification as a strategy for agricultural growth in Bangladesh. Specifically, the existence of economies of diversification, scale economies and diversification efficiencies at the farm level were examined using a stochastic input-distance function approach. The results reveal strong evidence of diversification economies amongst most crop enterprises except the combination of modern rice and modern wheat enterprises. Ray economies of scale exist in Bangladeshi cropping system. Also, significant are efficiency gains made from diversification among cropping enterprises. The key policy implication is that crop diversification should be a desired strategy for agricultural growth in Bangladesh. Development of the rural infrastructure is also essential as this will not only improve technical efficiency but may also synergistically promote crop diversification by opening up opportunities for technology diffusion, marketing, storage and resource supplies.     

Luddites, the industrial revolution, and the demographic transition

Technological change was unskilled-labor-biased during the early industrial revolution, but is skill-biased today. This implies a rich set of non-monotonic macroeconomic dynamics which are not embedded in extant unified growth models. We present historical evidence and develop a model which can endogenously account for these facts, where factor bias reflects profit-maximizing decisions by innovators. In a setup with directed technological change, and fixed as well as variable costs of education, initial endowments dictate that the early industrial revolution be unskilled-labor-biased. Increasing basic knowledge then causes a growth takeoff, an income-led demand for fewer but more educated children, and a transition to skill-biased technological change in the long run.     

Does Institutional Quality Matter for Financial Development and Growth? Further Evidence from MENA Countries

This study scrutinises the role of institutional quality in the linkage of financial development and economic growth in 21 Middle East and North African (MENA) countries. Using the common correlated effect mean pooled approach and annual data for the period 1980–2012, we find that not all measures of financial development promote economic growth in the absence of institutional quality, but they all augment growth in the presence of institutional quality. Furthermore, we find that foreign direct investment enhances the growth of MENA countries by the development of financial markets.     

Does financial cooperation agreement improve the cointegration among ASEAN+3 money markets?

This paper aims to empirically examine the degree of cointegration among ASEAN+3 money markets in order to determine and adopt remedial actions pursuant to vulnerabilities in the region’s money markets that indicate an inability to prevent possible financial crises. In order to validate vulnerabilities, this paper investigates the degree to which money markets are integrated. Inter-bank lending rates are divided based on agreement periods as well as on income levels of regional economies. The VAR-based Cointegration test and the VECM have been applied in the investigation process. The findings are: (1) weak integration during the pre-agreement period; (2) substantial progress toward the post-agreement period; (3) both high- and low-income markets integrate in a cooperative way; and (4) the agreement produces an impact that is incomplete in so far as integrating the region’s money markets. The finding of this study offers implications for the regional makers.