Optimum Currency Areas in East Asia: A Structural VAR Approach

Optimum Currency Area; Monetary Union; Vector autoregression; Exchange rate; East Asia Abstract: This paper assesses the empirical desirability of the East Asian economies to an alternative exchange rate arrangement (a monetary union) that can potentially enhance the exchange rate stability and credibility in the region. Specifically, the symmetry in macroeconomic disturbances of the East Asian economies is examined as satisfying one of the preconditions for forming an Optimum Currency Area (OCA). The Structural Vector Autoregression (VAR) method is employed to assess the nature of macroeconomic disturbances among the East Asian countries, as a preliminary guide in identifying potential candidates for forming an OCA. The preliminary findings of this study suggest that there exists scope among some small sub-regions for potential monetary integration.

A Bayesian Approach to Optimum Currency Areas in East Asia

This paper assesses the empirical desirability of the East Asian economies to an alternative exchange rate arrangement (a monetary union) that can potentially enhance the exchange rate stability and credibility in the region. Specifically, the symmetry in macroeconomic disturbances of the East Asian economies is examined as satisfying one of the preconditions for forming an Optimum Currency Area (OCA). We extend the existing literature by improving the methodology of assessing the symmetry shocks in evaluating the suitability of a common currency area in the East Asian economies employing the Bayesian State-Space Based approach. We consider a model of an economy in which the output is influenced by global, regional and country-specific shocks. The importance of a common regional shock would provide a case for a regional common currency. This model allows us to examine regional and country-specific cycles simultaneously with the world business cycle. The importance of the shocks decomposition is that studying a subset of countries can lead one to believe that observed co-movement is particular to that subset of countries when it in fact is common to a much larger group of countries. In addition, the understanding of the sources of international economic fluctuations is important for making policy decisions. Our findings also indicate that regional factors play a minor role in explaining output variation in both East Asian and the European economies. This implies that while East Asia does not satisfy the OCA criteria (based on the insignificant share of regional common factor), neither does Europe.Optimum Currency Area; Business Cycle Synchronisation, Monetary Integration; East Asia

THE ENDOGENEITY OF THE OPTIMUM CURRENCY AREA CRITERIA IN EAST ASIa

The Asian financial crisis in mid-1997 has increased interest in policies to achieve greater regional exchange rate stability in East Asia. It has renewed calls for greater monetary and exchange rate cooperation. A country’s suitability to join a monetary union depends, inter alia, on the trade intensity and the business cycle synchronization with other potential members of the monetary union. However, these two Optimum Currency Area criteria are endogenous. Theoretically, the effect of increased trade integration (after the elimination of exchange fluctuations among the countries in the region) on the business cycle synchronization is ambiguous. Reduction in trade barriers can potentially increase industrial specialization by country and therefore resulting in more asymmetry business cycles from industry-specific shocks. On the other hand, increased trade integration may result in more highly correlated business cycles due to common demand shocks or intra-industry trade. If the second hypothesis is empirically verified, policy makers have little to worry about the region being unsynchronized in their business cycles as the business cycles will become more synchronized after the monetary union is formed. This paper assesses the dynamic relationships between trade, finance, specialization and business cycle synchronization for East Asian economies using a Generalized Method of Moments (GMM) approach. The dynamic panel approach improves on previous efforts to examine the business cycle correlation –trade link using panel procedures, which control for the potential endogeneity of all explanatory variables. Based on the findings on how trade, finance and sectoral specialization have effects on the size of common shocks among countries, potential policies that can help East Asian countries move close toward a regional currency arrangement can be suggested. The empirical results of this study suggest that there exists scope for East Asia to form a monetary union.Optimum Currency Area; Monetary Union; Trade Integration; Business Cycle Synchronisation

A computational fluid dynamics of blood flow in cerebral saccular aneurysm / Azali Daud

The significance of this project is to expose me into CATIA V5R17 software and CFD software (Cd Adapco) environment. Therefore the combination of these two computational engineering tools will help to develop skills of designing the products from sketch to finishing. On the other hand, computational fluid dynamics will contribute the experience in numerical solutions involving analyzing problems of fluid flow and heat transfer through computational simulations By Using CFD analysis hopefully it can provide the guidance for surgical intervention decision making in some of the more questionable cases in cerebral aneurysm, the aneurysm characteristics can be analyzed and allow medical professionals to determine if an aneurysm is at risk of rupture. The simulated images will show the contours of pressure and wall shear stress on the aneurysms walls. The medical professional also can know whether surgery is wanted or not to reduce the risk of cerebral aneurysm amongst specific patients

Transmission mechanism in a developing economy: does money or credit matter?

This book covers empirical and policy oriented studies. It contents provide a through exposition of economic theory to shed light on real issues in understanding a developing country economy. The book is structured in an easy reading manner that makes it ideal for all levels of researchers, especially for the postgraduate students who are researching in the applied macroeconomics area

Money, income and the Lucas critique: the case for Malaysia

The objective of this study is to determine the usefulness of the monetary aggregates in Malaysia for policy action purposes. Money MI and M2 were tested for weak exogeneity, strong erogeneity and superexogeneity (which implies Lucas critique) within a seasonal error-correction model framework. Our weak exogeneity and superexogeneity tests suggest that money MI and M2 are not subject to the Lucas critique and thus imply that both monetary awegates are useful intermediate targets for monetary policy purposes. The importance of money as intermediate targets is further strengthened as our seasonal error-correction model indicates that money (MI and M2) and income exhibit stable long-run relationships

The effect of cost of credit on money demand: empirical evidence from Malaysia

This paper investigates the dynamic of long-run relationship between cost of credit and real money balances in Malaysia. The Johansen-Juselius (1990) likelihood ratio tests support the importance of the cost of credit in the real broad money demand function. The sample period spans from 1978:q1 through 1997:q4. The results provide empirical evidence for the long-run relationship between cost of credit and broad money balances in Malaysia

Customer motivation towards Pasar Tani (FAMA) / Rosliana Azali

The purpose for this project paper is to determine the factors that most influence customers go to Pasar Tani, to analyze the relationship between factors influence customers to shop with customer motivation towards Pasar Tani, and to identify which market best job of offering what customers want to shop in terms of it price and quality by comparing of Pasar Tani, supermarket and wholesale market under FAMA programmes. In addition, there are several factors that influence customers become motivated to shop at Pasar Tani especially in Melaka. The some factors that most influence are location, price, variety, freshness and choices. However, the factors that have significant relationship with customer’s motivation are location, price, variety, quality, services and choices. For the comparisons between Pasar Tani, supermarket and wholesale market by it price and quality of offering, supermarket is more valuable offering that most fulfill customers need and want. The findings from the study found several strategies that should recommend to FAMA Melaka. The several strategies are; FAMA Melaka should improve promotion activities, added some outdoor activities, increase training program for seller’s to attract customers, and located Pasar Tani at the strategic location

ASEAN-5+3 AND US STOCK MARKETS INTERDEPENDENCE BEFORE, DURING AND AFTER ASIAN FINANCIAL CRISIS

The issues of international stock markets linkages had been investigated over the time. Since the Asian financial crisis in 1997, many economists are concerned about the relationship between Asian stock markets and others in the world. This paper is conducted to examine the linkages between ASEAN-5+3 namely Malaysia, Singapore, the Philippines, Thailand, Indonesia, China, Japan and Korea and US stock markets. The data consists of weekly stock indices data. The total samples are separated into three subperiods. First period is pre-crisis period spanning from January 1990 to June 1997. Second period is during-crisis period spanning from July 1997 to June 1998. Third period is post-crisis period spanning from July 1998 to May 2007. All the indices applied are expressed in local currencies. The empirical analysis begins with testing the stationarity properties of the data. All the countries are found to be stationary at first difference except for Japan for pre-crisis period. Next, cointegration test is employed to test the long-run stationary relationship among the stock markets. The number of significant cointegrating vector is higher during-crisis compare to other periods whereas the same number of cointegrating vector is found before and after crisis. Granger-causality based on VECM showed that Thailand is exogenous whereby Malaysia is the most endogenous at before and during the crisis. After the crisis, US become dominant compare to the other countries. In conclusion, we found that ASEAN- 5+3 and US stock markets are interdependence during crisis and post-crisis periods and the impact of US stock market is effective in ASEAN-5+3 stock markets only for pre and during-crisis periodsStock markets, Cointegration, Granger-causality, ASEAN

Pataya: suatu Tinjauan Konstruksi Tempat Ngãbãr Komunitas Gay di Surabaya

Tempat ngèbèr sebagai tempat pertemuan laki-laki gay terseba —meskipun relatif terselubung—di berbagai tempat tempat publik di seluruh Indonesia. Tempat ngèbèr sebagai salah satu titik utama dalam konstelasi dunia gay berfungsi tidak hanya untuk mencari pasangan hubungan seksual, tapi juga untuk bersosialisasi, membuka diri, dan mendapat penerimaan. Surabaya memiliki banyak tempat ngèbèr yang cukup dikenal di kalangan laki-laki gay, dengan Pataya sebagai satu tempat ngèbèr terbesar. Namun dalam beberapa tahun terakhir, tampak adanya Perubahan-Perubahan yang menyebabkan Pataya tidak lagi sehidup dulu. Melalui metode partisipasi observasi dan wawancara non-formal, kajian ini berupaya untuk memahami bagaimana Pataya menjadi pilihan tempat ngèbèr di Surabaya, Perubahan-Perubahan apasaja yang terjadi dan menyebabkan penyusutan kehidupannya. Dari penelitian ini, diharapkan ada penelitian lanjutan untuk mempelajari adaptasi-adaptasi yang terjadi atau dapat dilakukan di luar situs ngèbèr.Keywords: space, place, sexuality, cruising, gay, ngèbèr, Surabay