Asia and the Global Economy最新文献

After a year of record international trade in 2022, it is uncertain whether the future of the global economy is fragmentation or a new institutional structure. The challenges are to re-establish a dispute resolution mechanism, as the WTO process currently allows decisions to be appealed into oblivion, and to extend the coverage of world trade law to address changes in world trade since 1995. This paper argues that the best option for a beyond-WTO institutional order is an expanded Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and that, absent a functioning WTO appeal system, the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) is a way to resolve appeals. This could lead to a three-tier global trade system as the expanded CPTPP membership observes the highest standard world trade rules, a second group accepts WTO rules but no more, and a third group has no interest in being bound by world trade rules. On the post-2017 record, the USA could be in any of these three groups. The leading Asian trading nations have a key role to play in ensuring that the first group accounts for the majority of world trade, and to encourage countries to want to follow CPTPP standards and to be at the table when extensions to these standards are discussed.

Moving away from a fixed exchange rate in 2005, China has gradually enlarged the band of fluctuations of Renminbi (RMB) and implemented various reforms on its central parity to have a more flexible exchange rate regime. This paper studies the nature of the exchange rate regime in China since the exchange regime reform of August 2015. Relying on the self-exciting threshold autoregressive (SETAR) model, it identifies endogenously the band of inaction beyond which the People's bank of China (China's central bank) starts to intervene in the foreign exchange market to restrict further fluctuations. Based on the comparison of the estimated threshold with the official band, this paper shows that the RMB/USD exchange rate followed an intermediate regime similar to the crawling band but with only one single threshold of intervention which is much lower than the upper boundary of the announced band.

Korea and ASEAN are currently seeing a golden age in their partnership; their trade and investment relations are strengthening rapidly, and ASEAN has become a key player in Korea's diplomacy. However, there are a number of challenges in this relationship, such as Korea's high level of reliance on a single ASEAN member (Vietnam), Korean businesses’ relatively short history in ASEAN, and inconsistencies and ambiguities in Korea's diplomatic approach towards ASEAN. In order to overcome these issues, Korean entities could consider seeking local partners in ASEAN, spotting economic and societal priorities in national and ASEAN development strategies, and taking advantage of ASEAN's intra-regional integration. There are two areas, namely Indonesia's electric vehicle value chain and smart city construction, in which Korea's public and private entities are attempting to gain a foothold by adopting these strategies.

In order for microfinance institutions (MFIs) to significantly impact the society, they must achieve both financial sustainability and outreach goals simultaneously. However, when MFIs prioritize financial sustainability at the expense of their outreach goals, it is regarded as mission drift. This study introduces the concept of the Kuznets curve hypothesis to explain the occurrence of mission drift in MFIs. By analysing data from 1,323 unique MFIs across 105 emerging countries, between 2010 and 2018, our findings corroborate the existence of the Kuznets curve for outreach and financial goals. The findings demonstrate that MFIs initially prioritize their outreach goal of serving more female clients but gradually shift focus towards financial performance as they expand and accumulate fixed assets. Moreover, we also empirically quantified the critical asset size of MFIs beyond which they are less likely to achieve their outreach and financial sustainability goals. The implications of these findings for policy are also discussed.

Narratives that portray macroeconomic policies in Japan as unlike ones pursued in other large economies persist. I revisit how several factors, including monetary, fiscal, and demographic factors impact Japan, the US, and the euro area. Panel VARs driven by factors or observed macroeconomic determinants are used. Many, but not all, of the shocks examined have similar impact across all three economies considered. This is true for monetary policy and the response of global inflation to demographic shocks. The response of real economic activity to many of the shocks considered is also comparable. Fiscal and demographic factors, often omitted in studies of this kind, also significantly impact all three economies although the size of the response does differ across the economies examined. Japan may not be like other systemically important economies in all respects, but its experience is less idiosyncratic than usually portrayed.

This paper investigates the relation between product market competition, corporate governance and firm performance in Indian manufacturing industries covering the period 1995–2017. Evidence suggests that firm performance improves as competition increases. Besides, results depict heterogeneity in the conditional determinants of firm performance between competitive and non-competitive industries. We observe that at upper quantiles of Tobin's q, competitive firms have better performance than their non-competitive counterparts. Findings also suggest that exogenous factors, such as managerial efficiency or managerial incentives provided by the promoters in competitive firms, may be some of the unobservable factors increasing the net positive differences in Tobin's q between competitive and non-competitive firms. This has the implication that policy frameworks are different in competitive and non-competitive industries. Moreover, we observe that the enactment of Clause 49 in December 2005, which aimed at improving corporate governance in India, improved firm performance in less competitive industries. The findings therefore imply that competition acts as an external mechanism to discipline management and increases firm performance as a consequence. Thus, competition seems to act as a substitute for direct institutional reforms to improve corporate governance. The results have important policy implications. Since improvement in corporate governance has relatively more pronounced effect in non-competitive industries, policy efforts should be made in that specific direction.

Meritocratic beliefs are defined as people's beliefs in the importance of hard work in societal success relative to other structural factors. As economic inequality grows, the plausibility of fair meritocracy has been called into a question, especially by those left behind by the supposedly meritocratic systems. Using data from the inequality module of International Social Survey Programme (ISSP), we find that a stronger belief in meritocratic values is associated with higher levels of inequality. Furthermore, our findings demonstrate a positive link between meritocratic beliefs and economic growth, with some indications that this relationship is mediated by inequality. From a policy perspective, this suggests that when efforts to engineer more equal outcomes in societies undermine the rewards of meritocracy, it has the potential to impede economic growth.

This paper links the ENVISAGE computable general equilibrium model with a microsimulation to assess the economic effects of implementing the Regional Comprehensive Economic Partnership (RCEP). Reductions of tariffs and non-tariff measures, implementation of a rule of origin, together with productivity gains stemming from trade cost reductions strengthens regional trade among RCEP members. The analysis indicate that tariff liberalization alone brings little benefit, with real income gains of 0.21 percent relative to the baseline (without the RCEP) in 2035. With liberal rules of origin, the gains in real income could double to 0.49 percent. The biggest benefits accrue when the productivity gains are considered, increasing real income by 2.5 percent and trade among RCEP members by 12.3 percent in 2035 relative to the baseline. RCEP has the potential to lift 27 million additional people to middle-class status by 2035. These aggregate effects mask large variety of outcomes across countries.

The Indonesian economy has a long history of steady growth punctuated by times of turmoil and crisis. Recently Indonesia has faced the COVID-19 pandemic, inflation, contractionary U.S. monetary policy, and fluctuating commodity prices. To examine how the economy is faring since the pandemic began, this paper compares sectoral stock returns since COVID-19 hit the Indonesian economy with forecasted returns based on macroeconomic variables. The results indicate that coal, iron and steel, health care, and pharmaceuticals are outperforming more than three years after the coronavirus crisis began. Tobacco, industrials, and sectors related to construction are underperforming. The regression evidence also indicates that Indonesian sectors are primarily exposed to the Indonesian stock market. Coal, iron and steel and natural resources stocks are less exposed to the Indonesian stock market and more exposed to the world stock market. Almost no sectors exhibit exposure to contractionary U.S. monetary policy. The importance of the Indonesian stock market in explaining stock returns reflects the fact that the Indonesian economy is largely driven by domestic demand. To increase its resilience, Indonesia should also nurture labor-intensive exports.

The article presents changes in trade flows of added value between ASEAN and China in the years 1995–2020. The article aims to assess the intensity of value-added flows in trade links between ASEAN and China. The article tried to answer whether the ASEAN economies and China take part equally in global value chains (GVCs) and regional value chains (RVCs). The article uses input-output models from the ICIO OECD database. The study shows significant changes in value-added flows between ASEAN and China since 1995. Not only the geographical structure of China's partners in ASEAN has changed, but also the participation and relative position of individual ASEAN economies in GVCs and RVCs. Generally, the role of China is growing while ASEAN economies are losing their positions in upstream GVCs and RVCs. However, ASEAN economies participate more strongly in GVCs and RVCs than China.