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Editor’s Choice : The impacts of International Financial Crisis on Saudi Arabia Economy: Evidence from Asymmetric SVAR modelling
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Abstract: This paper aims to measure the impacts of International Financial Crisis on the performance of the Saudi Arabian economy from 1968 to 2010. Linear and non-linear SVAR methodologies are used to exhibit the interdependence between the process of international liquidity, net-exports and economic growth. The empirical models show that the impacts of international financial crisis lead to an immediate drop in the net-exports and conduct to reduce gradually real economic growth during roughly three years. In the horizon, the variation in economic growth is largely attributed to domestic supply shocks, but negative shocks of international financial markets drove to reduce the economic growth in the long-run by 1.04%. Keywords: Financial Crisis, International Liquidity, Asymmetric SVAR Model, Saudi Arabia.Download Full Article |
Editor’s Choice - Exchange Rate Flexibility and the Integration of the Securities Market in East Asia
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Abstract: This paper discusses the time-varying degree of flexibility in exchange rate regimes and assesses the extent to which securities markets are integrated in East Asia. The dynamic conditional correlation model developed by Engle (2002) is used to analyze the time-varying characteristics of the conditional correlations of exchange rates as well as of bond and equity returns in emerging Asian economies. First, the presented analyses find that the flexibility of Asia’s exchange rate regimes increased substantially after the Asian crisis of 1997-98. Second, we show that Asia’s equity markets are becoming more globally and regionally integrated, whereas the bond markets in the region are still divided by national borders. These results suggest the existence of more scope for policymakers to promote financial integration in Asia, particularly in its bond markets. Keywords: Exchange rate flexibility, integration of the securities market, East Asia, dynamic conditional correlation.Download Full Article |
Editor’s Choice - Whose Governance? IMF Austerities in a Small Island State: The Case of Jamaica
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Abstract: The International Monetary Fund and the World Bank have for a long time embarked on what can be described as a ‘trustee’ relationship with countries in the Commonwealth Caribbean. From the latter half of the 1970s, countries such as Trinidad and Tobago, Guyana, Barbados as well as Grenada were ‘forced’ because of their chronic need for ‘hard’ currency loans to approach the IMF and the World Bank. These loans were accompanied by structural adjustment measures. This paper attempts, for the first time, to evaluate, in the case of Jamaica, whether the measures introduced by the Lending Agencies resulted in some measure of economic growth in the countries under review. The paper then examines the new agreements entered into by these countries and the measures that accompanied them. The overarching argument is that the forces of globalization as well as austerity measures introduced by lending agencies such the IMF and the World Bank prevents rather than encourages small island governments1 to embark on ‘national’ development plans and programs. In other words, the primary argument of this paper is that these countries are constrained in their ability to ‘govern’ themselves; rather their economic decisions are largely crafted by the forces of globalization and further reinforced by international lending agencies such as the World Bank and the International Monetary Fund. Keywords: International Monetary Fund (IMF), World Bank (WB), Jamaica, Globalization, National Development, Structural Adjustment, Agreements.Download Full Article |
Editor’s Choice : An Empirical Study of Sectoral-Level Investments in New Zealand
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Abstract: We extend the Glick and Rogoff (1995) aggregate time-series, empirical, intertemporal model of country-investment to a sectoral-level, and estimate it for New Zealand. We fit the model to panel data of eleven industries from 1988-2009. The sectoral-level investment growth is a function of lagged investment level, sector-specific total factor productivity shocks (TFP), country-specific TFP shocks, and global TFP shocks. The estimates seem robust to government spending shocks and Terms of Trade shocks. Keywords: Investments, total factor productivity, panel data. |
