Exchange Rates, Currency Crisis and Monetary Cooperation in Asia
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This book concentrates on exchange rates and their macroeconomic consequences, analytical and empirical issues relating to currency crises and policy responses and monetary and financial cooperation in Asia. It is truely pan-Asia-focused with chapters on China, Japan, Korea, India and Southeast Asia.
pooled sample. We ran a simple Chow breakpoint test with a null hypothesis of no structural change between the pre and post-crises periods for all the regressions (country and pooled). The null hypothesis can be rejected in all cases, suggesting there was a structural break postcrises (Table 1.8). We also undertook a number of robustness checks on the pooled regression. Among the more important checks are the following. One, we replaced the lagged cyclical income and lagged change in REER with
petroleum products) Core CPI (excluding food and energy) Target price index Indefinite Indefinite Target horizon Changes caused by major force None Escape clauses Table 3.1 Highlights of inflation targeting regimes in Korea and Thailand None Public explanation of breach and steps taken to address it Accountability Central Bank in consultation with Government Central Bank in consultation with Government Target set by Inflation report and submission to parliament, publication of
−3.454 −3.453 −3.457 Levels 1st difference P-P stat. critical value P-P stat. 5% critical value −2.301 −2.250 −1.790 −2.256 −3.453 −3.452 −3.452 −3.462 −8.513 −9.919 −9.945 −6.342 −3.453 −3.453 −3.453 −3.463 −1.808 −2.659 −1.847 −3.108 −2.261 −2.714 0.924 −3.468 −3.453 −3.454 −3.452 −3.452 −3.452 −3.453 −11.961 −6.500 −4.464 −9.157 −13.906 −8.437 −3.954 −3.468 −3.453 −3.454 −3.453 −3.453 −3.453 −3.453 Notes: LIMPR i—import price of Korea or Thailand; LEXRTi/USD—exchange rate of
see Montiel (2003). Also see Chapter 7 of this volume. 3. Also see Eijffinger and Goderis (2006), Gould and Kamin (2000) and Chapter 7 of this volume. 4. For an alternative—more precise—way of modelling the Laffer curve effects, see Goldfajn and Baig (1998). The benefit of incorporating risk premium in this manner is that it allows for the interpretation of Laffer curve effects as either an erosion of investments due to probability of default or decline in investor expectations leading to
are dominated by ten economies, viz. the eight economies in this chapter (India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand), as well as China and Hong Kong. It also includes a number of other countries categorized as “developing Asia” by the IMF. Source: IMF, World Economic Outlook Database, April 2006. emerging Asian economies under consideration have been actively neutralizing the impact of the reserve build-up in the sense that the NDA (which is broadly a proxy for