Macroeconomics and Finance in Emerging Market Economies 

About: Macroeconomics and Finance in Emerging Market Economies is an academic journal published by Taylor & Francis. The journal publishes majorly in the area(s): Monetary policy & Emerging markets. It has an ISSN identifier of 1752-0843. Over the lifetime, 321 publications have been published receiving 2052 citations. The journal is also known as: MFEME.

Competitive monetary easing: is it yesterday once more?

Abstract: Given weak post-crisis aggregate demand both advanced economies and emerging economies engage in competitive monetary easing, creating financial risks. To ensure stable and sustainable growth, the international rules of the game need to be revisited. Since internalizing spillovers to other countries may be difficult, large central banks could reinterpret their domestic mandate to take into account other country reactions over time (and not just the immediate feedback effects) and thus become more sensitive to spillovers. This weak ‘coordination’ could be supplemented with improvement of global safety nets.

A monetary policy model for India

Abstract: A New Keynesian model estimated for India yields valuable insights. Aggregate demand reacts to interest rate changes with a lag of three quarters, while inflation takes four quarters to respond to demand conditions. Inflation thus responds to monetary policy actions with a lag of seven quarters. Inflation is inertial and persistent when it sets in, irrespective of the source. Exchange rate pass-through to domestic inflation is low. Inflation turns out to be the dominant focus of monetary policy, accompanied by a strong commitment to the stabilization of output.

Foreign direct investment, financial development, and economic growth: the case of Malaysia

Abstract: This paper presents, within an endogenous growth model, an analysis of the interaction between foreign direct investment (FDI) and financial development in promoting Malaysia's economic growth Using a co-integration framework, this study estimates a dynamic endogenous growth function that includes the impact of FDI and financial sector evolution as well as some locational determinants for the sample period spanning from 1970 to 2001 The empirical evidence suggests that foreign direct investment, labour, investment, and government expenditure play a pivotal role in local economic prosperity More importantly, it is found that the interaction between FDI and financial development exerts a significant effect on the growth performance of Malaysia Perhaps the strongest result to emerge from our study is the significant role played by FDI–finance interaction in the growth process

Determination of inflation in an open economy Phillips curve framework: the case of developed and developing Asian countries

Abstract: This paper investigates the determination of inflation in the framework of an open economy forward-looking as well as conventional backward-looking Phillips curve for eight Asian countries – Japan, Hong Kong, Korea, Singapore, Philippines, Thailand, China Mainland and India. Using quarterly data from the 1990s to 2005 and applying the instrumental variables estimation technique, we find that the output gap is significant in explaining the inflation rate in almost all the countries. Furthermore, at least one measure of international competitiveness has a statistically significant influence on inflation in all the countries. The differences in the developed and developing world are highlighted by the significance of agriculture related supply shocks in determining inflation in the case of developing countries. For all countries, the forward-looking Phillips curve provides a better fit compared to the backward-looking variant.

Foreign direct investment and employment: host country experience

Abstract: This study investigates the effect of foreign direct investment (FDI) on employment creation and wages in Ghana. A simultaneous panel regression model is used in estimating the effect FDI has on employment and wages. The results of this study indicate that FDI has a statistically significant and positive effect on employment levels in Ghana, but has an insignificant effect on wages. FDI can greatly augment domestic efforts by creating more jobs in the economy. The results clearly demonstrate that FDI flows affect employment quantitatively, but not necessarily qualitatively. The study identifies other factors including, productivity, wages, sub-sector, and location as important in influencing employment levels. Also, productivity, labour union, firm size, sub-sector, and location are noted as significant in affecting wages in Ghana. The main value of this paper is in respect of the fact that it provides insight into the effects of FDI flow on employment from a host country perspective. The study recommends...