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31. Japan Moves toward Sustainable Recovery

Author:
John H. Makin
Publication Date:
10-2005
Content Type:
Policy Brief
Institution:
American Enterprise Institute for Public Policy Research
Abstract:
Japan's stock market, one of the world's strongest this year, is up about 20 percent since spring. It is doing remarkably well for a country whose nominal GDP is still below its 1997 level. By contrast, the U.S. stock market has been drifting lower all year. The S 500 Index is down about 4 percent in the last five months, even more when the highflying energy sector is excluded. This is the case despite U.S. nominal GDP having grown by a cumulative 46 percent since 1997. Clearly, stock markets are looking ahead and seeing a brighter future for Japan than for the United States.
Topic:
International Relations, Development, and Economics
Political Geography:
United States, Japan, Israel, and East Asia

32. The Poverty Macroeconomic Policy Nexus: Some Short-run Analytics

Author:
George Mavrotas and S. Mansoob Murshed
Publication Date:
12-2005
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The present paper utilises a short-run theoretical macroeconomic model of a small open economy to look at the impact of macroeconomic policies and financial deepening upon poverty through sectoral changes. This is because an expansion in certain sectors may cause greater poverty reduction. The model involves a non-traded and a traded sector on the formal side of the economy. The former is more capital intensive and the latter more unskilled labour intensive. Increased employment in the traded sector is more pro-poor compared to a similar rise in the non-traded sector as the former draws workers out of poverty in the informal sector. The model in our paper analyses short-run effects of devaluation, a rise in the money supply induced by financial deepening, and taxation to discourage non-traded goods consumption. Financial deepening can induce greater output and reduce poverty. Other results are mixed and taxonomic. We also attempt to differentiate between the stylised experiences of East Asia and Latin America. East Asian economies have relied more heavily on labour-intensive manufactured exports, whereas Latin America has had a relatively greater share of capital intensive and natural resource based exports. In recent decades countries in these two regions have had differing experiences in poverty reduction, with poverty arguably declining more in East Asia.
Topic:
International Relations, Development, Economics, and Poverty
Political Geography:
East Asia and Latin America

33. State Development Planning: Did it Create an East Asian Miracle?

Author:
Benjamen Powell
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
Independent Institute
Abstract:
East Asian countries have recorded large increases in per capita GDP over the last fifty years. Some observers have referred to this growth as an “East Asian Miracle.” One popular explanation attributes the rapid growth to state led industrial development planning. This paper critically assesses the arguments surrounding state development planning and East Asia's growth. Whether the state can acquire the knowledge necessary to calculate which industries it should promote and how state development planning can deal with political incentive problems faced by planners are both examined. When we look at the development record of East Asian countries we find that to the extent development planning did exist, it could not calculate which industries would promote development, so it instead promoted industrialization. We also find that what rapid growth in living standards did occur can be better explained by free markets than state planning because, as measured in economic freedom indexes, these countries were some of the most free market in the world.
Topic:
Development, Industrial Policy, and Politics
Political Geography:
Israel and East Asia

34. The case for regional exchange rate arrangement in East Asia'

Author:
Takuji Kinkyo
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
The Asian crisis highlighted the difficulties for developing countries to actively manage exchange rates in an environment of high capital mobility. Now it became fashionable to argue that the exchange rate should be either allowed to float freely or irrevocably fixed. This paper examines the case for regional exchange rate arrangements as an instrument to enhance the manageability of exchange rates and discusses the options in East Asia. It critically assess the existing proposal of common basket peg system and suggests that East Asia should seek to create an Asian-version of regional monetary system modeled on the EMS.
Topic:
International Relations, Development, Economics, and International Political Economy
Political Geography:
East Asia and Asia

35. Transpacific trade imbalances: causes and cures

Author:
Warwick McKibbin, Park Yung Chul, and Jong-Wha Lee
Publication Date:
09-2004
Content Type:
Policy Brief
Institution:
Lowy Institute for International Policy
Abstract:
This paper explores the causes of the transpacific trade imbalances using an empirical global model. It also evaluates the impact of various policies to reduce these imbalances. We find the fundamental cause of trade imbalances since 1997 is changes in saving-investment gaps, attributed to the surge of the U.S fiscal deficits and the decline of East Asia's private investment after the 1997 financial crisis. Our simulation results show that a revaluation of East Asia's exchange rates by 10 percent (effectively a shift in monetary policy) cannot resolve the imbalances. We find East Asia's concerted efforts to stimulate aggregate demand can have significant impacts on trade balances globally, but the impact on the US trade balance is not large. US fiscal contraction is estimated to have large impacts on the US trade position overall and on the bilateral trade balances with East Asian economies. These results suggest that in order to improve the transpacific imbalance, macroeconomic adjustment will need to be made on both sides of the Pacific. lowy institute for international policy.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Israel and East Asia

36. Election Watch: Japan — Japan's party system: shifting the political axis, releasing economic reform

Author:
Malcolm Cook
Publication Date:
02-2004
Content Type:
Policy Brief
Institution:
Lowy Institute for International Policy
Abstract:
Changes in Japan's party system offer new hope for Japan's long-delayed economic reform as the axis of voting power accelerated its shift to the urban areas. The upcoming Upper House1 elections will provide another opportunity to see how far these changes have come and how permanent they are. The Liberal Democratic Party (LDP) has dominated post-war Japanese politics due to the party's overwhelming support in Japan's declining rural areas. The LDP's iron grip on the rural vote has created and been maintained by a nexus of interests between LDP politicians, favoured construction companies and rural voters. This rural public works "glue" has been one of the main reasons the Japanese government has been unable to address its drastically declining fiscal position. The political power of Japan's small farming sector also explains why Japan's bilateral and multilateral free trade diplomacy has not progressed. The November 9 Lower House election results and the rise of a real alternative to the LDP promise to help Prime Minister Koizumi's three-year fight to "modernise" the LDP and make it more appealing to urban and younger voters. November 9's results also suggest that if Koizumi loses this intra-LDP battle, then in the next Lower House elections the LDP will lose. So whether Koizumi is successful or not, economic reform chances in Japan have been boosted. Australia's largest trading partner is better placed for free trade talks bilaterally and globally and to address its worrying fiscal situation, the largest threat looming over Japan's future prosperity.
Topic:
Development, Economics, and Politics
Political Geography:
Japan, Israel, East Asia, and Australia

37. What Went Right in Japan

Author:
Adam S. Posen
Publication Date:
09-2004
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Japan's recovery is strong. Real GDP growth will exceed 4 percent this year and likely be 3 percent or higher in 2005 and perhaps even 2006. The Japanese economy has been growing solidly for the last five quarters (average real 3.2 percent annualized rate), and the pace is sustainable, given Japan's underlying potential growth rate (which has risen to 2 to 2.5 percent per year) and the combination of catch-up growth closing the current output gap and some reforms that will raise the growth rate for quarters to come (though not permanently). Indicators of domestic demand beyond capital investment are increasingly positive, including housing starts bottoming out, inventories drawing down, and diminished deflation. Moreover, on the external side, while China was the main source of export growth in 2003, the composition of exports has become more balanced this year and is widening beyond that seen in other recoveries. Just as in the United States and other developed economies, a sharp slowdown in Chinese growth and a sustained further increase in energy prices represent the primary risks to the outlook.
Topic:
Development and Economics
Political Geography:
United States, Japan, China, Israel, East Asia, and Asia

38. Selective Intervention and Growth: The Case of Korea

Author:
Marcus Noland
Publication Date:
08-2004
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper attempts to determine whether conditions amenable to successful selective interventions to capture cross-industry externalities are likely to be fulfilled in practice. Three criteria are proposed for good candidates for industrial promotion: that they have strong interindustry links to the rest of the economy, that they lead the rest of the economy in a causal sense, and that they be characterized by a high s hare of industry-specific innovations in output growth. According to these criteria, likely candidates for successful intervention are identified in the Korean data. It is found that, with one exception, none of the sectors promoted by the heavy and chemical industry (HCI) policy fulfills all three criteria.
Topic:
Development and Economics
Political Geography:
Israel, East Asia, and Korea

39. Inaugural Oksenberg Lecture: The United States and China: A President's Perspective. An address by Jimmy Carter

Author:
Jimmy Carter
Publication Date:
08-2002
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
The Oksenberg Lectures honor the legacy of Professor Michel Oksenberg (1938–2001), Senior Fellow at the Asia/Pacific Research Center, professor of political science, and a foremost authority on China.
Topic:
Development
Political Geography:
China, Israel, East Asia, and Asia

40. On the Edge: Shaping the Future of Peri-urban East Asia

Author:
Douglas Webster
Publication Date:
05-2002
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
The term peri-urbanization refers to a process in which rural areas located on the outskirts of established cities become more urban in character, in physical, economic, and social terms, often in piecemeal fashion. Peri-urban development usually involves rapid social change as small agricultural communities are forced to adjust to an urban or industrial way of life in a very short time. High levels of migration are an important driver of social change. Rapid environmental deterioration; large-scale, often haphazard, land conversion; and infrastructure backlogs are major policy challenges associated with peri-urbanizing regions. Typically, peri-urbanization is stimulated by an infusion of new investment, generally from outside the local region in question, including foreign direct investment (FDI).
Topic:
Development
Political Geography:
East Asia