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Working Paper
Liberalization of Korea's foreign exchange markets
Working Paper
Country fund discounts and the Mexican crisis of December 1994: did local residents turn pessimistic before international investors?
It has been suggested that Mexican investors were the "front-runners" in the peso crisis of December 1994, turning pessimistic before international investors. Different expectations about their own economy, perhaps due to asymmetric information, prompted Mexican investors to be the first ones to leave the country. This paper investigates whether data from three Mexican country funds provide evidence that supports the "divergent expectations" hypothesis. We find that, right before the devaluation, Mexican country fund Net Asset Values (driven mainly by Mexican investors) dropped faster ...
Conference Paper
International capital mobility and exchange rate volatility
Working Paper
On the dollar and the yen
Working Paper
Who drives real interest rates around the Pacific Rim: the US or Japan?
This paper investigates the relative influence of US and Japanese real interest rates in the determination of local Pacific Rim rates, where influence is defined by the presence of common stochastic trends. Furthermore, the degree to which long run real interest parity holds is examined. The cointegration testing methodology of Johansen (1988) is adopted for this analysis, which allows for multiple cointegrating vectors. The results indicate that Hong Kong, Malaysia and Taiwan are linked with both the US and Japan (in terms of cointegration and positive covariation), while only Singapore is ...
Working Paper
ASEAN in a regional perspective
There are two striking conventional wisdoms about the status of regional trading blocs in East Asia. The first is that the only formal regional arrangement in the area, ASEAN, does not in fact function as an economic bloc. Trade among the members is thought to be very low. The second is that East Asia taken as a whole does function as a trading and investment bloc, under Japanese direction, and increasingly so over time. This despite the absence of any formal preferential trading area among these countries. This characterization of East Asian trading patterns is not entirely correct. ; ...
Working Paper
Monetary regime choices for a semi-open country
Working Paper
Trade and growth in East Asian countries: cause and effect?
Estimates of growth equations have found a role for openness, particularly in explaining rapid growth among East Asian countries. But major concerns of simultaneous causality between growth and trade have been expressed. This study aims to deal with the endogeneity of trade by using as instrumental variables the exogenous determinants from the gravity model of bilateral trade, such as proximity to trading partners. Our preliminary finding is that the effect of openness on growth is even clearer when we correct for the endogeneity of openness than in standard OLS estimates. We conclude ...