Measuring Regional Market Integration in Developing Asia: a Dynamic Factor Error Correction Model (DF-ECM) Approach

This paper examines empirically the dynamic process of regional market integration in twelve Asian economies using a new modeling approach combining DF with ECM. This approach enables us to obtain latent regional dynamic factors which correspond well with the 'foreign' parity variables in theory when a market is imperfectly integrated and which act, in explaining domestic short-run price adjustments, as leading-indicators in an errorcorrection form. The power of the DF-ECM approach is illustrated in its application to measuring market integration in the developing Asian region using monthly data from the past decade.Law of one price; market integration; dynamic factor; error-correction model

Forecasting Inflation and GDP growth: Comparison of Automatic Leading Indicator (ALI) Method with Macro Econometric Structural Models (MESMs)

This paper compares forecast performance of the ALI method and the MESMs and seeks ways of improving the ALI method. Inflation and GDP growth form the forecast objects for comparison, using data from China, Indonesia and the Philippines. The ALI method is found to produce better forecasts than those by MESMs in general, but the method is found to involve greater uncertainty in choosing indicators, mixing data frequencies and utilizing unrestricted VARs. Two possible improvements are found helpful to reduce the uncertainty: (i) give theory priority in choosing indicators and include theory-based disequilibrium shocks in the indicator sets; and (ii) reduce the VARs by means of the general→specific model reduction procedure.Dynamic factor models, Model reduction, VAR

Empirical Assessment of Sustainability and Feasibility of Government Debt: The Philippines Case

This paper develops empirical methods of assessing the sustainability and feasibility of public debt using the No Ponzi Game criterion, using the Philippines as the testing case. Both historical data and forecasts generated by a quarterly macro-econometric model are used in the assessment. Stochastic simulations are carried out to mimic future uncertainty. The test results show that, up to the end of the present administration in 2010, the Philippine government debt is not sustainable but weakly feasible, that the feasibility is vulnerable to major adverse shocks, and that simple budgetary deficit control policy is inadequate for achieving debt sustainability or strengthening feasibility.Government debt, Ponzi game, Rollover bond portfolio

A Macroeconometric Model of the Chinese Economy

This paper describes a quarterly macroeconometric model of the Chinese economy. The model comprises household consumption, investment, government, trade, production, prices, money, and employment blocks. The equilibrium-correction form is used for all the behavioral equations and the general→simple dynamic specification approach is adopted. Great efforts have been made to achieve the best possible blend of standard long-run theories, country-specific institutional features and short-run dynamics in data. The tracking performance of the model is evaluated. Forecasting and empirical investigation of a number of topical macroeconomic issues utilizing model simulations have shown the model to be immensely useful.Macroeconometric model, Chinese economy, Forecasts, Simulations

Which method is best for the induction of labour?: A systematic review, network meta-analysis and cost-effectiveness analysis

Background: More than 150,000 pregnant women in England and Wales have their labour induced each year. Multiple pharmacological, mechanical and complementary methods are available to induce labour. Objective: To assess the relative effectiveness, safety and cost-effectiveness of labour induction methods and, data permitting, effects in different clinical subgroups. Methods: We carried out a systematic review using Cochrane methods. The Cochrane Pregnancy and Childbirth Group’s Trials Register was searched (March 2014). This contains over 22,000 reports of controlled trials (published from 1923 onwards) retrieved from weekly searches of OVID MEDLINE (1966 to current); Cochrane Central Register of Controlled Trials (The Cochrane Library); EMBASE (1982 to current); Cumulative Index to Nursing and Allied Health Literature (1984 to current); ClinicalTrials.gov; the World Health Organization International Clinical Trials Registry Portal; and hand-searching of relevant conference proceedings and journals. We included randomised controlled trials examining interventions to induce labour compared with placebo, no treatment or other interventions in women eligible for third-trimester induction. We included outcomes relating to efficacy, safety and acceptability to women. In addition, for the economic analysis we searched the Database of Abstracts of Reviews of Effects, and Economic Evaluations Databases, NHS Economic Evaluation Database and the Health Technology Assessment database. We carried out a network meta-analysis (NMA) using all of the available evidence, both direct and indirect, to produce estimates of the relative effects of each treatment compared with others in a network. We developed a de novo decision tree model to estimate the cost-effectiveness of various methods. The costs included were the intervention and other hospital costs incurred (price year 2012–13). We reviewed the literature to identify preference-based utilities for the health-related outcomes in the model. We calculated incremental cost-effectiveness ratios, expected costs, utilities and net benefit. We represent uncertainty in the optimal intervention using cost-effectiveness acceptability curves. Results: We identified 1190 studies; 611 were eligible for inclusion. The interventions most likely to achieve vaginal delivery (VD) within 24 hours were intravenous oxytocin with amniotomy [posterior rank 2; 95% credible intervals (CrIs) 1 to 9] and higher-dose (≥ 50 μg) vaginal misoprostol (rank 3; 95% CrI 1 to 6). Compared with placebo, several treatments reduced the odds of caesarean section, but we observed considerable uncertainty in treatment rankings. For uterine hyperstimulation, double-balloon catheter had the highest probability of being among the best three treatments, whereas vaginal misoprostol (≥ 50 μg) was most likely to increase the odds of excessive uterine activity. For other safety outcomes there were insufficient data or there was too much uncertainty to identify which treatments performed ‘best’. Few studies collected information on women’s views. Owing to incomplete reporting of the VD within 24 hours outcome, the cost-effectiveness analysis could compare only 20 interventions. The analysis suggested that most interventions have similar utility and differ mainly in cost. With a caveat of considerable uncertainty, titrated (low-dose) misoprostol solution and buccal/sublingual misoprostol had the highest likelihood of being cost-effective. Limitations: There was considerable uncertainty in findings and there were insufficient data for some planned subgroup analyses. Conclusions: Overall, misoprostol and oxytocin with amniotomy (for women with favourable cervix) is more successful than other agents in achieving VD within 24 hours. The ranking according to safety of different methods was less clear. The cost-effectiveness analysis suggested that titrated (low-dose) oral misoprostol solution resulted in the highest utility, whereas buccal/sublingual misoprostol had the lowest cost. There was a high degree of uncertainty as to the most cost-effective intervention

Determinants of Structural Changes of Food Exports from Developing Countries

Over the past three decades, there has been a rapid expansion of processed food exports in developing countries, replacing traditional agriculture exports such as coffee and tea. However, this development and its policy implications have received little attention in the literature. This paper aims to redress this oversight by providing an overview of key characteristics and growth patterns of processed food exports in developing countries. The determinants of structural changes toward processed food exports in developing countries are examined using panel data econometric analysis. The results suggests that trade policy openness, large domestic market, good macroeconomic management especially in terms of price stability, as well as adequate financial support and infrastructure are the key factors that influence the structural changes toward processed food products.Food Safety Standards; Processed food trade; developing countries

Exploring the Philippine economic landscape and structural change using the input-output framework

Purpose – The purpose of this paper is to evaluate the degree of structural change of the Philippine economy and examine how linkages among sectors evolved during 1979-2000. Design/methodology/approach – The authors use the input-output tables of the Philippines to draw the economic landscape of the Philippines and to examine the degree of structural transformation that the economy has undergone since the 1970s. They perform a linkage analysis of 11 major economic sectors and through the multiplier product matrix, plot the economic landscape of the Philippines for 1979-2000. This allows identification of the sectors that have exhibited the highest intersectoral linkages. The authors also undertake a more disaggregated analysis within manufacturing and consider export sophistication and competitiveness. Findings – Manufacturing is consistently the key sector of the Philippine economy. Resource and scale-intensive manufacturing industries exhibit the highest linkages. The authors also find a growing impact on the economy of private services and transportation, communication and storage sectors, probably due to the globalization of these activities. But overall, compared to manufacturing, the service sector exhibits lower intersectoral linkages. Originality/value – The economic landscape of the Philippines shows the structural changes that have taken place. The empirical findings lead to the conclusion that the Philippines cannot afford to leapfrog the industrialization stage and depend solely on a service-oriented economy, when the potential for growth still lies primarily on manufacturing. The results of this study can be used for government policy formulation. The government should institute policy reforms that directly target the industrial sector to accelerate economic growth.Economic development, Economic sectors, Input/output analysis, Philippines