Book Reviews

Ian Chalmers and Vedi R. Hadiz (eds) (1997), The Politics of Economic Development in Indonesia, Routledge, London, pp. xxx + 269. A$155.00.

Geoff Forrester (ed.) (1999), Post-Soeharto Indonesia: Renewal or Chaos? Institute of Southeast Asian Studies, Singapore, and KITLV Press, Leiden, pp. 373. Cloth: S$49.90/US$32.90; paper: S$29.95/US$19.95/A$29.95.

Corden, Max (1999), The Asian Crisis: Is There a Way Out?, Institute of Southeast Asian Studies, Singapore, pp. 82. S$19.90/US$12.90.

Karl D. Jackson (ed.) (1999), Asian Contagion: The Causes and Consequences of a Financial Crisis, Westview Press, Boulder CO, pp. xvi + 312. Cloth: US$75.00; Paper: US$30.00.

H.W. Arndt and Hal Hill (1999), Southeast Asia's Economic Crisis: Origins, Lessons and the Way Forward, Institute of Southeast Asian Studies, Singapore, pp. 192. Cloth: S$66.90/US$44.90; paper: S$28.00/US$17.90/A$29.95.

Manuel F. Montes (1998), The Currency Crisis in Southeast Asia: Update, Institute of Southeast Asian Studies, Singapore, pp. xl + 62. Cloth: S$36.00 /US$24.00; paper: S$25.90/US$17.90.     

Forward exchange rates in general equilibrium

This paper develops a two-country, overlapping-generations model of an economy with a forward market in foreign exchange. The equilibrium forward rate exhibits the conventional decomposition into the expected future spot rate, a convexity term and a risk premium. Unlike partial equilibrium models, however, the model expresses these terms as functions of the primitive structural parameters of the economy. It thus provides insights into the structure of the premium which may facilitate interpretation of empirical studies of the forward markets. In particular, it suggests that time-varying risk premia may arise from changes in the distribution of wealth between countries over time.     

Linking quality & quantity

Interpretations are theoretical structures that explain empirical facts. The joint use of data from qualitative and quantitative studies can provide empirical facts for interpretation that are both valid and reliable. The examples reviewed in this article show how articulated qualitative and quantitative research can ameliorate three interrelated methodological problems that have hindered the gaining of an interpretive understanding of social actions. These are: (1) verstehen and the implementation of empirical studies to assess the subjective meaning of social actions; (2) the linking of understanding and explanation; and (3) the linking of macro and micro analysis.     

Collusion,entry, and market shares

This paper analyzes market entry and collusion in a model of duopoly with product-specific-set-up costs. The analysis demonstrates that collusion can alter the incentives for entry deterrence. We find conditions under which an established firm will permit entry and collude with a potential entrant even though entry deterrence is a viable option under noncooperative oligopoly rules. Conditions are also specified in which entry will be effectively impeded and collusion will not be undertaken.