Journal ArticleDOI
Synchronized Business Cycles in East Asia and Fluctuations in the Yen/Dollar Exchange Rate
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In this paper, the authors explore the repercussions of depreciating the yen against the dollar on the other East Asian economies, which largely peg to the dollar, and show that a major yen devaluation would have a negative impact on incomes in other east Asian economies and that it is not a sensible policy option for Japan.Abstract:
Because many authors have proposed stimulating the ailing Japanese economy by monetary expansion and yen depreciation, we explore the repercussions of depreciating the yen against the dollar on the other East Asian economies—which largely peg to the dollar. Since 1980, economic integration among Japan's neighbors—China, Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore, and Thailand—has intensified and (except for China) their business cycles have been highly synchronized. These cycles have been closely linked to fluctuations in the yen/dollar exchange rate—through changes in their export competitiveness and inflows of foreign direct investment. We show that a major yen devaluation would have a negative impact on incomes in other East Asian economies and that it is not a sensible policy option for Japan.read more
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The East Asian Dollar Standard, Fear of Floating, and Original Sin
TL;DR: This article argued that the fear of floating is entirely rational from the perspective of each individual country and their joint pegging to the dollar benefits the East Asian dollar bloc as a whole, although Japan remains an important outlier.
Journal ArticleDOI
The East Asian Dollar Standard, Fear of Floating, and Original Sin
TL;DR: In this article, the authors argue that the fear of floating is entirely rational from the perspective of each individual country and, although Japan remains an important outlier, their joint pegging to the dollar benefits the East Asian dollar bloc as a whole.
Journal ArticleDOI
Exchange Rate Volatility and Growth in Small Open Economies at the EMU Periphery
TL;DR: In this article, the impact of exchange rate stability on growth for a sample of 41 mostly small open economies at the EMU periphery is investigated, and it is argued that fixed exchange rates provide a more stable framework for the adjustment of asset and labour markets of countries in the economic catch-up process thereby accelerating growth.
Posted Content
The Return to Soft Dollar Pegging in East Asia: Mitigating Conflicted Virtue
TL;DR: In this article, the authors proposed increasing the weight of the yen in East Asian currency baskets, which made them vulnerable to a depreciating yen, thereby aggravating the crisis.
Journal ArticleDOI
Exchange Rate Volatility and Growth in Emerging Europe and East Asia
TL;DR: In this paper, the impact of exchange rate volatility on growth in emerging Europe and East Asia was investigated and cross country panel estimations provided evidence for a negative impact of the exchange rate variance on growth.
References
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Journal ArticleDOI
The East Asian Miracle: Economic Growth and Public Policy . A World Bank Policy Research Report. London: Oxford University Press, 1993. xvii, 289 pp.
Journal ArticleDOI
The Endogenity of the Optimum Currency Area Criteria
TL;DR: This paper investigated the relationship between international trade patterns and international business cycle correlations and found that countries with closer trade links tend to have more tightly correlated business cycles, while countries with weaker trade links tended to have weaker business cycles.
Journal ArticleDOI
Exchange Rates and Foreign Direct Investment: An Imperfect Capital Markets Approach
Kenneth A. Froot,Jeremy C. Stein +1 more
TL;DR: The authors examined the connection between exchange rates and foreign direct investment that arises when globally integrated capital markets are subject to informational imperfections, and developed a simple model of this phenomenon and test for its relevance in determining international capital flows.
Japanese Monetary Policy: A Case of Self-Induced Paralysis?
TL;DR: The Japanese economy continues in a deep recession and the short-range IMF forecast is that, as of the last quarter of 1999, Japanese real GDP will be 4.6% below its potential as mentioned in this paper.
ReportDOI
Theoretical Analysis Regarding a Zero Lower Bound on Nominal Interest Rates
TL;DR: In this paper, the authors explore several issues concerning a possible zero lower bound including its theoretical rationale, the magnitude of effects of low sustained inflation on real interest rates, the validity of analyzing monetary policy in models with no monetary variables, and the dynamic stabilizing properties of Taylor rules in a ZLB context.