IS THERE A CASE FOR LOW INFLATION‐INDUCED PRODUCTIVITY GROWTH IN SELECTED ASIAN ECONOMIES?

The authors examine the evidence on the relationship between inflation and productivity growth for nine Asian economies using causality analysis in a multivariate model with money supply as a possible effective monetary policy tool. The inflation-productivity growth relationship is found to be non-uniform, as the evidence of uni-directional, bi-directional, and no causality between the two variables is varied and significant for some countries and insignificant for others. An attempt is made to explain the inflation-productivity nexus for these countries and to discuss implications for anti-inflationary policies such as inflation targeting. ( JEL E31, O47, C32)     

THE IMPLICATIONS OF EUROPEAN UNION SUGAR PRICE CUTS, ECONOMIC PARTNERSHIP AGREEMENT, AND DEVELOPMENT AID FOR FIJI

The objective of this paper is to use a set of varied scenarios related to the Economic Partnership Agreement (EPA) and the loss of European Union (EU) sugar preferences (in the form of partial and full price liberalization) in combination with the recently committed EU development aid to examine the impact on Fiji using a dynamic computable general equilibrium model. It is shown that without aid, the loss of sugar preferences has devastating impact on real output, exports, rural employment, and other macroeconomic indicators. Without aid, the EPA scenarios, on the other hand, lead to some growth in real output but depress rural employment and non-sugar agricultural exports. Although improvements are observed across the scenarios with aid, it is argued that aid would be more effective if it directly addresses the supply-side constraints in Fiji instead of focusing on the sugar sector. ( JEL C68, D58, F17, O56)