The effect of the establishment of an organized exchange on weak form efficiency: the case of Istanbul Gold Exchange

Evidence is presented from IGE (the Istanbul Gold Exchange) that an institutional regulation such as the establishment of an organized exchange is an important component of informational efficiency that should not be disregarded in the process of financial liberlization.     

IMF programs, financial and real sector performance, and the Asian crisis

This paper has three objectives. First, using a richer and more comprehensive set of IMF-related news than previous studies, we examine the impact of IMF-related news on both financial and real stock sector returns in Indonesia during the Asian crisis. Second, we draw lessons about financial and real sectoral patterns of adjustment in crisis countries, including whether and how IMF programs facilitate this adjustment. Third, we explore the interplay between IMF actions in crisis countries and the actions and responses of local authorities. To do so, not only do we account for the impact of news regarding IMF policy actions but also the government’s reaction to them and willingness to implement such policies, and the public sentiment about the implemented IMF programs and government policies. We discuss the policy implications of the findings.     

Financial liberalisation: from segmented to integrated economies

Capital market liberalisation transforms segmented stock markets into integrated ones. Further impact should be expected on the dynamics of the rest of the domestic economy. This study presents evidence to that effect. A significant change after liberalisation is the emergence of world returns as an influential factor on other economic fundamentals. The information content of world returns influences emerging market returns prior to capital market liberalisation and this relation continues after capital market liberalisation. What is new after liberalisation is the influence of world returns on the dynamics of the domestic economy as a whole and its relation to stock returns.