Proposed strategy for a regional exchange rate arrangement in post-crisis East Asia

After discussing major conceptual, and empirical issues relevant to the exchange rate policies of East Asian countries, the authors propose a regional exchange rate arrangement designed to promote intra-regional exchange rate stability, and regional economic growth. They argue that: 1) For developing countries, exchange rate volatility tends to significantly hurt trade and investment, making it inadvisable to adopt a system of freely floating exchange rates. 2) Given the high share of intra-regional trade, and the similarity of trade composition in East Asia, exchange rate policy should be directed toward maintaining intra-regional exchange rate stability, to promote trade, investment, and economic growth. 3) the current policy of maintaining exchange rate stability against U.S. dollar as an informal, uncoordinated mechanisms for ensuring intra-regional exchange rate stability is sub-optimal. A pragmatic policy option - conducive to a more robust framework for cooperation in monetary, and exchange rate policy - wold be a coordinated action to shift the target of nominal exchange rate stability, to a basket of tri-polar currencies (the U.S. dollar, the Japanese yen, and the Euro). This alternative would better reflect the region's diverse structure of trade, and foreign direct investment.The authors envision no rigid peg. Instead, at least initially, each country could choose its own formal exchange rate arrangement - be it currency board, a crawling peg, or a basket peg with wide margins. At times of crisis, the peg might be temporarily suspended, subject to the rule that the exchange rate would be restored to the original level as soon as practical. Only in extreme circumstances, would the level be adjusted to reflect new equilibrium conditions.Environmental Economics&Policies,Economic Stabilization,Macroeconomic Management,Fiscal&Monetary Policy,Economic Theory&Research

Japan's official development assistance : recent issues and future directions

Japan remains the world's largest national donor of aid funds. But the Japanese government, facing prolonged economic stagnation and mounting public sector debt, is under increasing public pressure to reduce aid budgets and to use official development assistance in more explicit pursuit of Japan's own economic and political interests. Internationally, Japan continues to attract criticism for its emphasis on infrastructure projects and its limited willingness to participate in multilateral partnerships. The authors argue that Japan can meet these domestic and international challenges by developing a coherent national strategy for official development assistance, broadly designed to enhance effectiveness, accountability, and transparency.Decentralization,Banks&Banking Reform,Payment Systems&Infrastructure,Gender and Development,Economic Adjustment and Lending,Banks&Banking Reform,Development Economics&Aid Effectiveness,Economic Theory&Research,Economic Adjustment and Lending,Public Sector Economics&Finance

A survey of the literature on managing capital inflows

How to manage capital inflows remains an important policy issue for many emerging market economies. This paper presents a brief survey of the literature on managing capital inflows, with a focus on developing and emerging market economies. The paper, after discussing the economic characteristics of capital inflows, provides an overview of the evolution of thinking on capital account liberalization, the use of capital controls as an instrument of managing capital inflows, and the effectiveness and limitations of conventional macroeconomic and structural instruments. Although the literature is still evolving, it provides little practical guidance on capital account liberalization. For those countries facing a surge in capital inflows, consensus seems to be that, aside from learning to live with an appreciating (and fluctuating) currency, and strengthening the financial system, there is no effective and sustainable policy measure either to reduce the size of inflows or to prevent the adverse consequence of such inflows. Additional work is especially needed to develop tools to identify and quantify the various risks of capital inflows

Why was Japan hit so hard by the global financial crisis?

Japan was hit hard by the global financial crisis even though its relatively resilient financial system initially limited the direct impact. The severe collapse of industrial production that followed was no doubt attributable to a confluence of factors, but the paper highlights the impact that came from the contractionary effect of global deleveraging on the real economy. In this environment, Japan was particularly vulnerable because of the structural changes that had taken place over the past decade in its trade and industrial structures. Vector autoregression analysis confirms that, as a result of these structural changes, Japanese output became much more responsive to output shocks in the advanced markets of the United States and Western Europe. The structural changes had two components. First, over 90% of Japan's exports consisted of highly income-elastic industrial supplies, capital goods, and consumer durables. Though emerging Asia is Japan's largest export market, its imports from Japan largely consist of intermediate goods used in the production of final goods destined for the US and Western Europe. Second, Japan's trade dependence had increased since the early 2000s, as evidenced by a rising export to gross domestic product ratio and a declining share for the non-tradable sector. Though increasing trade openness is a natural part of economic globalization and regional integration, the manner in which this process had played out made Japan particularly vulnerable to a negative demand shock coming from outside. To make Japan more resilient to external shocks, policymakers could promote the export of finished goods to emerging Asia by establishing a region-wide free trade arrangement. To promote domestic demand, the social protection system needs to be strengthened so as to reduce households' uncertainty for the future; a more liberal immigration policy should help invigorate private investment in an aging society. To facilitate a better allocation of resources, further deregulatory measures in the more regulated non-tradable goods sector are called for; a substantial lifting of restrictions in agriculture, especially regarding the corporatization of production, would be especially helpful. With little available fiscal space, these measures will help create a climate in which private investment can flourish, driven by final domestic demand

Coupling between pore formation and phase separation in charged lipid membranes

We investigated the effect of charge on the membrane morphology of giant unilamellar vesicles (GUVs) composed of various mixtures containing charged lipids. We observed the membrane morphologies by fluorescent and confocal laser microscopy in lipid mixtures consisting of a neutral unsaturated lipid [dioleoylphosphatidylcholine (DOPC)], a neutral saturated lipid [dipalmitoylphosphatidylcholine (DPPC)], a charged unsaturated lipid [dioleoylphosphatidylglycerol (DOPG$^{\scriptsize{(-)}}$)], a charged saturated lipid [dipalmitoylphosphatidylglycerol (DPPG$^{\scriptsize{(-)}}$)], and cholesterol (Chol). In binary mixtures of neutral DOPC/DPPC and charged DOPC/DPPG$^{\scriptsize{(-)}}$, spherical vesicles were formed. On the other hand, pore formation was often observed with GUVs consisting of DOPG$^{\scriptsize{(-)}}$ and DPPC. In a DPPC/DPPG$^{\scriptsize{(-)}}$/Chol ternary mixture, pore-formed vesicles were also frequently observed. The percentage of pore-formed vesicles increased with the DPPG$^{\scriptsize{(-)}}$ concentration. Moreover, when the head group charges of charged lipids were screened by the addition of salt, pore-formed vesicles were suppressed in both the binary and ternary charged lipid mixtures. We discuss the mechanisms of pore formation in charged lipid mixtures and the relationship between phase separation and the membrane morphology. Finally, we reproduce the results seen in experimental systems by using coarse-grained molecular dynamics simulations.Comment: 34 pages, 10 figure

Charge-induced phase separation in lipid membranes

The phase separation in lipid bilayers that include negatively charged lipids is examined experimentally. We observed phase-separated structures and determined the membrane miscibility temperatures in several binary and ternary lipid mixtures of unsaturated neutral lipid, dioleoylphosphatidylcholine (DOPC), saturated neutral lipid, dipalmitoylphosphatidylcholine (DPPC), unsaturated charged lipid, dioleoylphosphatidylglycerol (DOPG$^{\scriptsize{(-)}}$), saturated charged lipid, dipalmitoylphosphatidylglycerol (DPPG$^{\scriptsize{(-)}}$), and cholesterol. In binary mixtures of saturated and unsaturated charged lipids, the combination of the charged head with the saturation of hydrocarbon tail is a dominant factor for the stability of membrane phase separation. DPPG$^{\scriptsize{(-)}}$ enhances phase separation, while DOPG$^{\scriptsize{(-)}}$ suppresses it. Furthermore, the addition of DPPG$^{\scriptsize{(-)}}$ to a binary mixture of DPPC/cholesterol induces phase separation between DPPG$^{\scriptsize{(-)}}$-rich and cholesterol-rich phases. This indicates that cholesterol localization depends strongly on the electric charge on the hydrophilic head group rather than on the ordering of the hydrocarbon tails. Finally, when DPPG$^{\scriptsize{(-)}}$ was added to a neutral ternary system of DOPC/DPPC/Cholesterol (a conventional model of membrane rafts), a three-phase coexistence was produced. We conclude by discussing some qualitative features of the phase behaviour in charged membranes using a free energy approach.Comment: 17 pages, 6 figure

Frequency of Actual Mosquito Attacks during the Summer Season in Central Japan: a Monitored Investigation.

Weekly records of mosquito attacks in the usual life of voluntary monitors were analyzed to evaluate the realistic frequency of mosquito attacks. Culex pipiens pallens, Cx. tritaeniorhynchus, and Aedes albopictus were equally incriminatory species. The male monitors who engaged in outdoor activities such as cleaning, repairing and gardening experienced more attacks than the others whose main outdoor activities were shopping, strolling and visiting other places. More attacks were reported from June to August than in other months, and the number of attacks per man-day was consistently around 0.3 during this period, although the predominant species shifted from Cx. pipiens pallens to Cx. tritaeniothynchus and Ae. albopictus. The attacks were most frequent at dusk. Seasonal change in the density examined by UV-light trap did not always reflect the seasonal tendency of attacks