Policy Analyses
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Policy Analyses
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An Examination of the Formation of Natural Trading Blocs in East Asia
This paper seeks to identify the appropriate form of a regional trading agreement in East Asia by examining empirically the intra-regional trade bias of various informal regional groups. The findings are as follows. First, it is d..
Chang-Soo Lee et al. Date 2002.12.30
Financial integrationDownloadContentSummaryThis paper seeks to identify the appropriate form of a regional trading agreement in East Asia by examining empirically the intra-regional trade bias of various informal regional groups. The findings are as follows. First, it is difficult to verify empirically that the three Northeast Asian countries, China, Japan and Korea, are forming a regional trading bloc. Second China and ASEAN have no special relation in trade. Third, ASEAN+3 is emerging as a strong candidate for a natural trading bloc in East Asia. Fourth, there is little evidence that ASEAN+3 is centred around Japan, while the influence of the U.S. on the intra-regional trade in ASEAN+3 is positive and strong. Fifth, ASEAN+3 is characterized by openness to trade with the rest of the world. Finally, these results strongly suggest that ASEAN+3 would be the natural policy choice for the formation of regional trading agreements in East Asia. At the same time, ASEAN+3 will not diverge from the principles of open regionalism and multilateralism, when we consider its inherently open character and the positive influence of the U.S. -
How Far Has Regional Integration Deepened?
Deep regional integration is accompanied by harmonization and coordination of regulatory regimes and policies. Such developments may result in the promotion and facilitation of trade in services, since liberalization of trade in s..
Soon-Chan Park Date 2002.12.30
Economic integrationDownloadContentExecutive Summary
I. Introduction
II. Services Liberalization in RIAs
1. EU
2. NAFTA
3. ASEAN
4. MERCOSUR
5. ANDEAN
III. Empirical Analysis
IV. Results
V. Concluding Remarks
ReferencesSummaryDeep regional integration is accompanied by harmonization and coordination of regulatory regimes and policies. Such developments may result in the promotion and facilitation of trade in services, since liberalization of trade in services requires regulatory reforms to reduce the market segmenting effect of domestic policies. To provide a clue to the question of how far regional integration agreements have advanced, this paper estimates the effects of regional integration on trade in nine services by using a gravity model. The results show that the existing regional blocs are at different stages. We identify that the efforts of the EU towards deep integration have had a significant impact on trade in services between members, while NAFTA, Mercosur and Andean trade less with their own members than their potential as suggested by income and geography. -
The Importance of the Recent Resilience of the New Zealand Economy and Its Implications
The Importance of the Recent Resilience of the New Zealand Economy and Its ImplicationsThe New Zealand economy has been remarkably resilient over the past few years. Although, the country did record minus growth once in 1998 due ..
Kyoung-Doug Kwon Date 2002.12.20
Economic developmentDownloadContentSummaryThe Importance of the Recent Resilience of the New Zealand Economy and Its Implications
The New Zealand economy has been remarkably resilient over the past few years. Although, the country did record minus growth once in 1998 due to the 1997 East Asian crisis, it immediately recovered in 1999 and achieved a high growth rate in 2000. Considering its economic performance over the past five years, it seems safe to conclude that New Zealand will be able to achieve sustainable long-term economic growth. (The rest is omitted.) -
Understanding the Determinants of Capital Flows in Korea: An Empirical Investigation
Over the past few decades, we have witnessed a surge in the volume of international capital flows, in particular into developing countries. Capital flows have both positive and negative effects on the economy. In order to maximize..
Sammo Kang et al. Date 2002.12.20
Monetary policyDownloadContentSummaryOver the past few decades, we have witnessed a surge in the volume of international capital flows, in particular into developing countries. Capital flows have both positive and negative effects on the economy. In order to maximize the benefits of capital flows and at the same time minimize the costs of capital flows, we first need to understand which factors affect capital flows for certain countries. (The rest is omitted.) -
Exchange Rate Regimes and Monetary Independence in East Asia
This paper examines whether changes in exchange rate arrangements have affected monetary independence in East Asian countries after the 1997 Asian crisis. We find that the sensitivity of local to U.S. interest rates has declined f..
Chang-Jin Kim et al. Date 2002.12.05
Monetary policy, Exchange rateDownloadContentSummaryThis paper examines whether changes in exchange rate arrangements have affected monetary independence in East Asian countries after the 1997 Asian crisis. We find that the sensitivity of local to U.S. interest rates has declined for many Asian countries since they adopted floating exchange rate regimes after the crisis. This empirical finding suggests that the choice of exchange rate regime is an important factor for the independence of monetary policy. Floating regimes appear to offer East Asian countries at least some degree of monetary independence after the East Asian crisis. -
Liberalization Measures in the Process of Korea's Corporate Restructuring: Trade, Investment and Capital Account Market Openings
This paper reviews the liberalization measures that have been implemented in Korea since the financial crisis in 1997, and analyzes how well and in what ways they have contributed to corporate restructuring, and ultimately, to eco..
Chan-Hyun Sohn et al. Date 2002.11.30
Economic openingDownloadContentSummaryThis paper reviews the liberalization measures that have been implemented in Korea since the financial crisis in 1997, and analyzes how well and in what ways they have contributed to corporate restructuring, and ultimately, to economic rehabilitation. (The rest is omitted.) -
Implementing the Bogor Goals of APEC
The Shanghai Accord, which was produced by the leaders meeting of APEC 2001 in China, can be interpreted as an effort to move forward the APEC to the Bogor Declaration. Major agenda of the Shanghai Accord are as follows; 1) broade..
Hongyul Han Date 2002.11.30
Economic cooperation, Free tradeDownloadContentSummaryThe Shanghai Accord, which was produced by the leaders meeting of APEC 2001 in China, can be interpreted as an effort to move forward the APEC to the Bogor Declaration. Major agenda of the Shanghai Accord are as follows; 1) broadening APECs vision for the future by identifying a conceptual and policy framework to guide APEC in the new century, 2) Clarifying APECs roadmap for achieving the Bogor Goals on schedule, 3) Strengthening APECs implementation mechanism by strengthening the Individual Action Plan Peer Review process reinforcing Ecotech and capacity building efforts. The Shanghai Accord is a substantial progress because it provides a clearer definition of the Bogor goals and the methods of implementation. However, more practical measures need to be developed if the Shangai Accord is able to provide a meaningful momentum to achieve the Bogor Goals. (The rest is omitted.) -
Stock Return Co-movements between Stocks in the U.S. and Korea
This report examines the stock return co-movements between stocks in the U.S. and Korea, analyzing the phenomenon, the dynamic evolving process, the channel, and the reason. The co-movements began to appear in the mid-1990s and st..
Chung-Eun Lee Date 2002.11.30
Capital marketDownloadContentSummaryThis report examines the stock return co-movements between stocks in the U.S. and Korea, analyzing the phenomenon, the dynamic evolving process, the channel, and the reason. The co-movements began to appear in the mid-1990s and started to deepen at the end of 1990s. The historical trend is found not only in stock returns but also in the volatility of the returns. U.S. stock returns affect Korean stock returns but not vice versa. U.S. stock prices only affect the next day's stock prices in Korea. However, the co-movements deepen when monthly data was analyzed. The degree of co-movement between the U.S. and Korea is similar to the co-movements between the U.S. and Japan or the U.S. and U.K.
Foreign investors are the major source of the co-movement, which is reflected in the fact that the co-movement deepened in the 1990s when foreign investors actively started to buy Korean stocks. In addition, foreign investors are more sensitive to U.S. stock prices than individual or institutional domestic investors. This is evident in the fact that Korean stock prices rise when foreign investors buy Korean stocks; however prices fall when individual domestic investors buy Korean stocks. Thus, the channel of the co-movement is as follows: an increase in U.S. stock prices induces foreign investors to buy Korean stocks and raises Korean stock prices. (The rest is omitted.) -
Can East Asia Emulate European Economic Integration?
The purpose of this paper is to provide a view on the current process and future prospects for regional financial and monetary cooperation in East Asia. Looking forward, financial cooperation in East Asia will be evolutionary. For..
Yung Chul Park et al. Date 2002.11.30
Economic integrationDownloadContentExecutive Summary
I. Introduction
II. Overview of the Chiang Mai Initiative (CMI)
III. Creation of Monitoring and Surveillance System
IV. Barriers to Financial Cooperation and Integration
V. Future Prospects
ReferencesSummaryThe purpose of this paper is to provide a view on the current process and future prospects for regional financial and monetary cooperation in East Asia. Looking forward, financial cooperation in East Asia will be evolutionary. For over a half century, European countries worked hard to develop various institutional frameworks which encouraged their cooperation on monetary and financial matters. If the European experience is any guide, it may take many years to develop effective cooperative arrangements and institutions in East Asia. However, there may be a breakthrough over the next few years as we gain a better understanding of the economic consequences of European monetary unification. The enlargement of the EU in 2004, when eight central and East European countries are expected to be admitted, will also have a large impact on the way East Asian policymakers think about regionalization in East Asia. -
Narrowing the Digital Gap in the APEC Region
The international digital gap has been a growing concern of the world today. The paper examines this issue in the context of APEC. Based on a statistical review of digitization performance over the period 1995-2000, it is claimed ..
Yoo Soo Hong Date 2002.11.30
Economic cooperationDownloadContentSummaryThe international digital gap has been a growing concern of the world today. The paper examines this issue in the context of APEC. Based on a statistical review of digitization performance over the period 1995-2000, it is claimed that the digital gap in the APEC region has improved or, at least, has not worsened. (The rest is omitted.)
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