Modeling the Behavior of the KRW/USD Exchange Rate and Policy Implications

Abstract

This paper examines the behavior of the KRW/USD exchange rate based on four major models. Using the mean absolute percent error (MAPE) as the criterion, the purchasing power parity (PPP) model using the relative producer price index (PPI) performs the best, followed by the extended investment saving-liquidity preference money supply (IS-LM) model, the Frankel model, the purchasing power parity model based on the relative consumer price index (CPI), the Dornbusch model, the Frenkel model, and the uncovered interest parity model. The generalized Box–Cox model indicates that the log-log form for the PPP model can be rejected.     

Testing purchasing power parity for Japan and the US: A structural-break approach

In this work we empirically assess the weak and strong forms of purchasing power parity (PPP) hypothesis for the economies of Japan and US. Monthly data for the, traded-goods price indices and the JPY/USD exchange rate are employed for the, period from January 2000 to October 2012. This period includes large shocks, such as, the US subprime crisis and the 2011 Tsunami in Japan. We take into account possible, structural shifts and breaks by employing the class of Lee and Strazicich, 2003, Lee and Strazicich, 2004 unit, root tests. Empirical analysis suggests that a break corresponding to the start of the US subprime crisis is not rejected. Furthermore, utilizing the Gregory and Hansen (1996) and, Hatemi (2008) cointegration methodologies, the weak form of PPP is not rejected. We, also test the strong PPP hypothesis by using Dynamic Ordinary Least Squares, (DOLS). The empirical evidence rejects the strong form of PPP for the period, preceding the US subprime crisis in contrast to the period after.     

Terms of trade, catch-up, and home-market effect: The example of Japan

This paper explores theoretically and empirically the medium- and long-run relation of the terms of trade (ratio of traded goods prices) and economic growth of a pair of countries—one of which experiences a major catch-up process towards the other. Two theoretical interdependencies between the terms of trade and economic growth are offered: the home-market effect and the productivity-shock effect. These two effects are tested against each other in a cointegration analysis on data for Japan and the US from 1971 until 1997. Income is cointegrated with the terms of trade. The relevant empirical channel is the home-market effect. However, financial-market effects appear also to be relevant. J. Japanese Int. Economies 21 (4) (2007) 470–488.     

Small business lending under the PPP and PPPLF programs

We use Call Report data to examine the effects of the Paycheck Protection Program (PPP) and the PPP Liquidity Facility (PPPLF) on small business and farm lending by individual commercial banks. As program participation was associated with small business lending, we adopt an instrumental variables approach to identify causal implications based on historical bank relationships with the Small Business Administration and the Federal Reserve’s discount window. Our results indicate that both programs encouraged lending growth over the first half of 2020. However, while the PPP encouraged greater lending across all banks, only small and medium-sized bank lending growth was significantly related to participation in the PPPLF.     

基于多地区城市地下综合管廊应用PPP模式风险评价

在对综合管廊应用PPP模式的风险进行识别的基础上,利用灰色故障树模型(FTA)对应用PPP模式的城市地下综合管廊项目进行全生命周期分析,筛选风险产生的基本事件,通过确定对于基本事件关联度的大小,得出其需要重视的基本事件。并通过改进关联度函数进行实证分析,验证评价方法的科学性及实用性。最后,提出相适宜的管理意见对风险进行规避,对城市地下综合管廊工程项目应用PPP模式风险管理具有一定指导和借鉴意义。     

The Marketisation of Early Childhood Education and Care (ECEC) in Australia: A Structured Response

The marketisation of early childhood education and care (ECEC) offers opportunities to test assumptions about the benefits of a market framework. In Australia, where marketisation included reshaping, extending, and increasing government subsidies, one major listed company (ABC Learning Limited) emerged to dominate child care. Child care prices increased rapidly to become an election issue, and government subsidies increased. ABC acknowledged its economic dependence on government policy and subsidies. Until its collapse in 2008, ABC was the world's largest listed child care operator, and operating internationally. ABC's structured business model separated child care properties (propco) from child care operations (opco). ABC was the opco and leased the child care properties from propcos. As ABC grew and replicated its structured model to other forms of property including intangible assets, the rising child care prices and government subsidies supported a growing array of other enterprises all seeking profitable operations. This paper explains the structured opco‐propco model, identifies its interaction with accounting and lessons to be learned from marketisation.     

Multidimensional principal–agent value for money in healthcare project financing

Value for money (VfM) is a key parameter for the public sector in the choice between a public–private partnership (PPP) and traditional procurement, especially for healthcare infrastructure. This paper investigates the differences in what VfM means to the public and private sectors.     

Unbundling tolls from contracts: a new road PPP model

Considerable evidence from different countries has revealed important shortcomings in most road public–private partnership (PPP) models. In this paper a new PPP model is presented that overcomes some of the problems found in PPP road contracts. The new model is based on separating user tolls from the fees paid to PPP contractors and setting up new institutional arrangements to oversee PPPs.     

Risk assessment for public–private partnership projects: using a fuzzy analytic hierarchical process method and expert opinion in China

Public–private partnerships (PPP) have been widely used in China to procure public facilities and services. Complicated problems in PPP projects in China arise because of a variety of risk factors. A proper risk assessment model is needed to identify risks and provide risk response strategies for future Chinese PPP projects. The fuzzy analytic hierarchy process (F-AHP) method provides the ability to solve complex risk assessment of PPP projects. Current risk assessment models are limited to PPP projects in specific countries and do not consider unique risks in China, especially political, economic, social, and legal risks. This paper designed a risk evaluation index system for PPP projects based on the Delphi expert investigation method, and then established an optimized risk evaluation model for PPP projects in China using the F-AHP method. The risks identified are confirmed by interviewing experts from Chinese local government departments, private enterprise, third-party intermediary consulting and regulatory agencies, and academic organizations. The results show that the risks that ranked among the top ten are closely related to China’s political and economic policies and relationships among stakeholders. It can be concluded that government authorities play a critical role in providing a favorable political, social, and economic environment and an effective institutional framework for PPP projects. Furthermore, it is also important to deal with relationships among stakeholders based on the public–private ‘win–win’ principle. This study provides risk response strategies, addressing key issues from eight aspects: an impeccable legal and regulatory framework; a central coordinating and regulating PPP authority; supportive governmental authorities; institutional capacity-building; favorable economic conditions and viability; community, partner, and moral accountability; clear division of responsibilities through contracts; and effective advisory management. These effective measures may be useful in reducing the adverse effects of risk for PPP projects in China.     

PPP风险分析研究文献综述

PPP融资模式在国内外都得到了广泛的应用,其成功实施的关键在于对风险的分析.国外对PPP融资项目风险的研究已经形成了比较完善的体系,尤其是在风险分析的方法模型方面,已经达到了前沿的水平,并且也有了一些自己的学派.国内关于PPP融资模式风险的研究从分担关系上讲主要分为四个层次,包括对PPP项目风险量的研究;对项目风险进行单方面分配的研究;项目参与方共同分担风险的研究;项目风险管理研究.文章分析总结了上述四个层次的研究,并提出了目前研究的不足,对PPP项目风险研究具有一定的指导作用.