A tale of Asian exchange rate management: Romance of the three currencies

Asian currencies lack regional policy coordination and are therefore subject to volatilities such as the Asian currency crisis of 1997/99. As the Asian currencies have already been observed to be ‘flying-in-unison’, a stable exchange rate arrangement can be helpful as the next step of evolution for regional financial stability. We consider that creating a cluster effect from coordinated efforts/policies of policy-makers can lead to regional exchange rate stability. To demonstrate this cluster effect, a three-party-game is computed for an Asian bloc, viz-á-viz US dollar and the Euro, based on a Nash and a cooperative equilibrium. The cluster effect would generate external and internal pressures that work towards the formation of a regional currency, although the exact form of exchange rate regime would have to await political consensus. There are substantial welfare gains within Asia network economy through currency cooperation. The formation of an Asian currency bloc would also create counter-balance to the current dominance of the US dollar and the Euro. Like the epic story of Three Kingdoms who sought hegemony in Chinese history, the Asian currency bloc will contend with many possible outcomes of competition as well as cooperation.     

Financial stress,economic activity and monetary policy in the ASEAN-5 economies

This article uses a structural vector autoregression approach to analyse the impact of financial stress on the economy and the relationship between monetary policy and financial stress in the ASEAN-5 economies (Indonesia, Malaysia, Philippines, Singapore and Thailand). We find that an increase in financial stress leads to tighter credit conditions and lower economic activity in all five countries. The estimated impact on the real economy displays an initial rapid decline followed by a gradual dissipation. In Malaysia, the Philippines and Thailand, the central banks tend to reduce policy interest rates (IRs) when financial stress increases, although there is substantial cross-country variation in the magnitude and time dynamics. The lower policy IRs are found to have little significant effects in lowering financial stress, but are still effective in stimulating economic activity through other channels. These findings imply that easing monetary policy is likely necessary but insufficient to address growth slowdowns associated with financial stress. Monetary easing should instead be complemented with other policy measures which are targeted at restoring financial stress to normal levels.     

基于MCI视角的货币政策估计:以马来西亚为例

基于强调利率平价重要作用的货币状况指数(MCI)的视角,试图为开放型新兴市场经济估计一个最优货币政策模型,其目的是阐明内部和外部平衡的重要性和提供分析基础.通过估计利率和汇率对产出缺口的相关影响及实际利率和实际汇率的权重可以估计最优货币状况指数.用多种方法检验产出缺口的适度性,其被估计权重是1.6:1,它可以用来阐述货币政策的操作目标.     

Trends in Publications of Chinese Economic Studies: authors, journals and research fields, 1991–2003

Parallel to the rise of the Chinese economy has been the worldwide growth in economic scholarship on China. This paper examines the trends in the literature on the Chinese economy across journals, authors and research fields and, where possible, identifies events contributing to these trends. It is hoped that identification of these trends will provide useful references for researchers, not only in sourcing information but also in considering channels for publication in the field of Chinese economic studies.