Exchange Rate Adjustment in Partially Liberalized Economy

This paper develops a model of exchange rate determination in partially liberalized post-socialist economy that operates under soft budget constraints in nontradable sectors. The model captures the factors that determine the evolution of a country's external balance during the initial phase of economic liberalization. Three types of disturbances are the center of analysis: liberalization of trade and foreign exchange regime, devaluation, and price liberalization. We show that the real exchange rate appreciation may either improve or worsen the trade balance depending on the sources of this appreciation. Thus, we argue that the real exchange rate cannot reflect true country's competitiveness unless all sectors are equally exposed to hard budget constraints. The model implications are further analyzed through the empirical evidence on the relationship between the real exchange rate and trade balance in three selected East European countries.     

Export diversification and the S-curve effect in a resource-rich state: evidence from Azerbaijan

Resource-rich states often miss out on diversified export-led growth opportunities due to their overreliance on resource-generated revenues. One strategy to boost non-resource exportation is to temporarily devalue the domestic currency and to provide exporters with some price competitiveness. This paper applies the notion of currency devaluation to the issue of export diversification via the S-curve principle. A comprehensive analysis of aggregate, bilateral, and industry-level trade is employed for Azerbaijan—a country-model for resource-abundant states with underdeveloped non-oil sectors. Consistent and strong evidence in favor of the S-curve effect is found in all stages of our analysis. In particular, a depreciative shock to the exchange rate correlates positively with the balance of trade on the aggregate and bilateral levels, as well as in 16 of the 20 industries examined. Results confirm previous literature findings. Azerbaijan’s non-oil exportation responds to a depreciated Manat in a systematically positive way, which adds further value to the argument of using currency devaluations for export diversification in resource-rich economies.     

Is devaluation contractionary? Empirical evidence for Pakistan

The paper examines the effect of real devaluation on economic growth. In the empirical model we include few other theoretically justified variables e.g., money supply, foreign remittances, and government spending as they appear relevant for Pakistan. The ADF unit root test is used for stationarity of the series. Also, to capture possible structural breaks due to currency regimes shifts, the Saikkonen and Lütkepohl unit root test is used. We apply the ARDL bounds testing approach to cointegration to explore a long run relation among the series; and the variance decomposition method and impulse response function for the direction of causality. The findings affirm cointegrating relation among the series. Real devaluation exerts contractionary effect on economic growth. The results should help in formulating a comprehensive trade policy including the use of competitive devaluation as a tool to correct balance of payments problems.     

Is there J-Curve effect in the commodity trade between Korea and rest of the world?

Previous studies that investigated the short-run and long-run effects of depreciation of the Korean won on the Korean trade balance with the rest of the world have not been able to discover significant effects. Suspecting that these studies suffer from aggregation bias, we disaggregate Korean trade flows with the rest of the world by commodity and consider the response of trade balances of 148 industries to changes in the real effective exchange rate of the won. We find that in the short run the trade balance of 91 industries are affected by exchange rate changes. However, the short-run effects last into favorable long-run only in 26 industries, a unique finding that is absent from the literature.     

Do exchange rate changes have threshold effects on the trade balance? Evidence from Tunisia

Economic Change and Restructuring - The main objective of this paper is to shed new light on the nonlinear relationship between exchange rate changes and trade balance. Different from...     

Symmetry,proportionality and productivity bias hypothesis: evidence from panel-VAR models

By imposing symmetry and proportionality conditions and using the asymptotic theory of panel-VAR models, this study examines the behavior of real exchange rates and productivity bias hypothesis for New Zealand vis-a-vis her major trading partners and the proposed free trade area. The evidence clearly rejects the strong version of the PPP hypothesis but the weak version of the PPP hypothesis receives some support. The findings also indicate that productivity differentials among countries are one of the major sources that contribute to the deviation of the PPP-based exchange rate from the equilibrium rate. Policy implications for the proposed free trade agreement are offered.     

评析指数条款及其新发展

浮动汇率制下,货币贬值是比较普遍的国际现象,涉及货币债务的国际合同特别是长期合同大多难以逃脱合同价值贬值的宿命。为了保持合同价值,合同当事方开始将合同债务与某些商品、数据或者其他标准相联系,其中最常使用的便是指数条款。指数条款虽然曾经或者正在面对一系列的争议和法律障碍,但是由于其先天的科学性和优越性,已经成为国际经贸合同中预防贬值的最佳途径。     

Do exchange rate regimes affect the role of central banks as banking supervisors?

We investigate the effect that exchange rate regimes have on the degree of central bank involvement in banking supervision. Using both de jure and de facto exchange rate regimes, we find that, conditional on several other factors affecting supervisory power allocation, policymakers are more willing to delegate this task to central banks when the latter are pegging their currency to some kind of parity. This evidence is confirmed when instrumental variables are added, in order to account for possible endogeneity. Results suggest that exchange rate regime features can mitigate the trade offs that political authorities face in evaluating the possibility of assigning supervision to monetary authorities.     

土地用途管制下的开发权交易——基于指标流转实践的分析

我国土地用途管制的特色之一是其年度用地指标分配政策。为了获得更多用地指标,地方政府在实践中创造了多种类型的指标流转方式,这与国外的开发权交易相差不大。无论是为了平衡土地用途管制所导致的土地权利人之间的利益失衡,还是为了化解当前的土地争议,抑或化解耕地保护与用地需求之间的矛盾、促进城乡统筹发展,我国都有必要构建包括实地开发权、转用开发权、市地开发权在内的开发权交易制度,让土地权利人成为最终的交易主体,通过市场来发现各类开发权的价格。     

一国外汇储备大量增加是否负有调整汇率的义务

汇率是调整国际收支的重要杠杆。从《IMF协定》第4条和《新决议》的相关规定来看,在汇率操纵、外部不稳定和汇率严重偏差造成一国国际收支出现大量盈余或赤字等情况下,该国和其它相关国家负有调整汇率以此调整国际收支的义务。但是仔细分析不难看出,这些规定概括模糊,缺乏可操作性,逆差国和顺差国之间的义务难以理清,且《新决议》中的多数指导原则缺乏法律拘束力。故当今西方声称人民币汇率导致了全球国际收支失衡,要求人民币不切实际地加速升值,是缺乏牢靠标准和依据的。我国应重视以上义务规定,同时用好这些规定,为人民币汇率改革提供法律保障。     

The asymmetric effects of exchange rate volatility on US–Pakistan trade flows: new evidence from nonlinear ARDL approach

Economic Change and Restructuring - Earlier studies that examined the response of trade flows to exchange rate volatility relied on the assumption that increased volatility and decreased volatility...     

An elasticity approach to the analysis of Romanian foreign trade policy during the years of transition

This paper focuses on the effect of exchange rate variations on the economic evolution of a country in transition, facing inflation, output decrease and negative external shocks; the particular case of Romania is considered. The theoretical part is linked to the Fleming-Mundell model for an open economy, but additional assumptions of price mobility and capital immobility are introduced. The usual interest rate versus output graphic framework is switched from one to another, which plots the exchange rate (or real exchange rate) versus output; the author considers that such a representation fits the behavior of an economy in transition towards a market-based system better. A main role, according to this interpretation, is played by the exchange rate elasticities of imports and exports, which influence the images of the equilibria on the goods market and the balance of payment (the IS and BOP curves' slopes). Finally, an empirical analysis is made, as an example, on the Romanian energy imports data series; the attempts to calculate the exchange rate elasticity may be considered as reliable only in the short term. In order to estimate the global exchange rate elasticities of imports and exports, some aggregations of partial sectorial results might be a possible solution. In the Romanian case, the resulting elasticities seem to be lower than for other countries; this poses the question as to the effectiveness of exchange rate policies in managing the Romanian economy.     

《汇率改革促进公平贸易法案》评析

2010年9月29日,美国国会众议院通过了《汇率改革促进公平贸易法案》,试图通过修改其1930年《关税法》,授权主管机关对所谓低估本币汇率的国家征收特别关税。本文分析了该法案出台的背景,简述了其主要内容,并剖析了其立法动向,指出人民币汇率问题对美中经贸关系十分重要,以立法干预贸易是非常危险的动向。     

论机动车之价值贬损

价值贬损的赔偿日益成为实践中突出的问题。在属性上,价值贬损属于直接、客观、现实损失。在支持与反对赔偿价值贬损的意见中,全部赔偿原则倾向于支持赔偿;而政策考量提出了现实的忧虑,技术因素也成为赔偿的"软肋"。但采用经济分析可提供解决思路——有限赔偿。在根本上,司法承认价值贬损是侵权法进步的方向,同时也是主体利益受保护程度提高的标志。     

Non-human Primate Studies Inform the Foundations of Fair and Just Human Institutions

Experiments with human participants have inspired new theories to capture human social, economic, and justice preferences, and shed new light on the foundation of institutions that promote and support large-scale exchange. Another source of valuable data for informing this agenda derives from studies with non-human primates. Here, we argue that primate studies of social preferences provide behavioral evidence supporting the role of the brain as an evolved social record-keeping device. Our argument follows Dickhaut et al. (Accounting Horizons 24:221?C255, 2010), who pointed to record-keeping as critical in enabling large-scale trade. Here, we note that record-keeping also underlies justice judgments in both personal exchange and large-scale trade. The reason is that evaluating whether an allocation is just requires tracking not only benefits that accrue locally, but also benefits for distant others. Further, if record-keeping is an evolved trait (as Dickhaut et al. in Accounting Horizons 24:221?C255, 2010 suggest), then it seems reasonable to expect it to be evidenced not only in humans, but also in non-human primates. Indeed, we argue that evidence from non-human primate research supports the Dickhaut hypothesis, thus supporting the role of justice in the emergence of fair and efficient economic exchange.     

Is there aJ-curve for the economic transition from socialism to capitalism?

It is often assumed that the process of transition from socialism to capitalism involves a dislocation and disorganization of the economy in the early stages of the transition. Thus, it is argued, economic performance will at first worsen and then gradually improve as the new system takes hold. This paper argues that, based on evidence from Czechoslovakia, Hungary, and Poland, there is no evidence for such aJ-curve phenomenon. Using a simple macroeconomic model, we show that, in these three reforming countries, the decline in production can be explained by exogenous shocks to the balance of trade, to investments and to autonomous consumption. This finding also suggests that macroeconomic policy in these countries may be too restrictive to permit a recovery of employment and production.     

Optimization and validation of a fast amplification protocol for AmpFlSTR Profiler Plus for rapid forensic human identification

The goal of this work was to optimize and validate a fast amplification protocol for the multiplex amplification of the STR loci included in AmpFlSTR^® Profiler Plus^® to expedite human DNA identification. By modifying the cycling conditions and by combining the use of a DNA polymerase optimized for high speed PCR (SpeedSTAR™ HS) and a more efficient thermal cycler instrument (Bio-RAD C1000™), we were able to reduce the amplification process from 4 h to 26 min. No modification to the commercial AmpFlSTR^® Profiler Plus^® primer mix was required. When compared to the current Royal Canadian Mounted Police (RCMP) amplification protocol, no differences with regards to specificity, sensitivity, heterozygote peak height ratios and overall profile balance were noted. Moreover, complete concordance was obtained with profiles previously generated with the standard amplification protocol and minor alleles in mixture samples were reliably typed. An increase in n − 4 stutter ratios (2.2% on average for all loci) was observed for profiles amplified with the fast protocol compared to the current procedure. Our results document the robustness of this rapid amplification protocol for STR profiling using the AmpFlSTR^® Profiler Plus^® primer set and demonstrate that comparable data can be obtained in substantially less time. This new approach could provide an alternative option to current multiplex STR typing amplification protocols in order to increase throughput or expedite time-sensitive cases.     

Taxation,money, and credit,in a liberalizing socialist economy

Understanding the system of financial control in the pre-existing régime of ‘classical’ socialism is a key to understanding what might go wrong in the transition. Accordingly, this paper proceeds in four steps by examining:

1. how domestic fiscal and monetary processes complement central planning in the classical socialist economy;
2. why this mechanism for securing domestic financial control under classical socialism tends to break down naturally into inflation when decentralization begins and central planning though direct materials balancing is weakened;
3. how, in a more deliberate transition, domestic tax and monetary arrangements might be better managed to keep the price level stable as prices of individual goods and services are freed; and
4. how, in moving toward free foreign trade, explicit policies governing tariffs and foreign exchange convertibility could best parallel and complement the evolving restraints on money and credit in domestic commerce.

In effect, moves to dismantle the apparatus of central planning, decontrol prices, privatize property, and so on need to be supported by a proper sequence of fiscal, monetary and foreign exchange measures-as analyzed more fully in the author's new bookThe Order of Economic Liberalization. In this short essay, a summary outline of such a financial order is provided.     

Revisiting Purchasing Power Parity for India using threshold cointegration and nonlinear unit root test

This study examines the Purchasing Power Parity (PPP) hypothesis in case of India for her five major trading partners over the period of 1991M₁–2009M₂. The study used the DF-GLS unit root test and threshold autoregressive (TAR) model as well as momentum-TAR (M-TAR) models for empirical analysis. However, we relied on TAR and MTAR models based cointegration tests to draw conclusions because of their superiority to traditional cointegration techniques as these models have limit cycles, amplitude dependent frequencies, and jump phenomena. These models are capable of producing asymmetric limit cycles and are suitable for time series data. Our empirical exercise reveals that PPP hypothesis does not exist for all major trading partners in case of India. This reveals that intermediate goods face high barriers to trade in this sampled countries. This supports the argument that Indian government has not been able to strike out the proper balance between flexibility and stability between real bilateral exchange rates and thus unable to maintaining confidence in the domestic currency that has been evident from the recent fall of rupee in relation to the US dollar.     

A comparative analysis of trade and economic integration in East Asia and Latin America

This paper provides an analysis of the two channels of regional integration: integration via markets and integration via agreements. Given that East Asia and Latin America are two fertile regions where both forms of integrations have taken place, we examine the experiences of these two areas to illustrate our conclusions. There are three related results. First, East Asia has been integrating via the markets long before formal agreements have been in vogue in the region. Latin America, on the other hand, has primarily been using formal regional trade treaties as the main channel of integration. Second, despite the relative lack of formal regional trade treaties until recently, East Asia is more integrated among itself than Latin America. Third, from a purely economic and trade standpoint, the proper sequence of integrations seems to be first integrating via the markets and subsequently via formal regional trade agreements. One interpretation of the relative success of the East Asian approach is that regional trade agreements often serve multiple constituents. Integrating via markets first can be helpful because this can give a stronger political bargaining power to the outward-looking economic-oriented forces within the country.