Policy Analyses
PUBLISH
Policy Analyses
-
Implementing the Bogor Goals of APEC
The Shanghai Accord, which was produced by the leaders meeting of APEC 2001 in China, can be interpreted as an effort to move forward the APEC to the Bogor Declaration. Major agenda of the Shanghai Accord are as follows; 1) broade..
Hongyul Han Date 2002.11.30
Economic cooperation, Free tradeDownloadContentSummaryThe Shanghai Accord, which was produced by the leaders meeting of APEC 2001 in China, can be interpreted as an effort to move forward the APEC to the Bogor Declaration. Major agenda of the Shanghai Accord are as follows; 1) broadening APECs vision for the future by identifying a conceptual and policy framework to guide APEC in the new century, 2) Clarifying APECs roadmap for achieving the Bogor Goals on schedule, 3) Strengthening APECs implementation mechanism by strengthening the Individual Action Plan Peer Review process reinforcing Ecotech and capacity building efforts. The Shanghai Accord is a substantial progress because it provides a clearer definition of the Bogor goals and the methods of implementation. However, more practical measures need to be developed if the Shangai Accord is able to provide a meaningful momentum to achieve the Bogor Goals. (The rest is omitted.) -
Stock Return Co-movements between Stocks in the U.S. and Korea
This report examines the stock return co-movements between stocks in the U.S. and Korea, analyzing the phenomenon, the dynamic evolving process, the channel, and the reason. The co-movements began to appear in the mid-1990s and st..
Chung-Eun Lee Date 2002.11.30
Capital marketDownloadContentSummaryThis report examines the stock return co-movements between stocks in the U.S. and Korea, analyzing the phenomenon, the dynamic evolving process, the channel, and the reason. The co-movements began to appear in the mid-1990s and started to deepen at the end of 1990s. The historical trend is found not only in stock returns but also in the volatility of the returns. U.S. stock returns affect Korean stock returns but not vice versa. U.S. stock prices only affect the next day's stock prices in Korea. However, the co-movements deepen when monthly data was analyzed. The degree of co-movement between the U.S. and Korea is similar to the co-movements between the U.S. and Japan or the U.S. and U.K.
Foreign investors are the major source of the co-movement, which is reflected in the fact that the co-movement deepened in the 1990s when foreign investors actively started to buy Korean stocks. In addition, foreign investors are more sensitive to U.S. stock prices than individual or institutional domestic investors. This is evident in the fact that Korean stock prices rise when foreign investors buy Korean stocks; however prices fall when individual domestic investors buy Korean stocks. Thus, the channel of the co-movement is as follows: an increase in U.S. stock prices induces foreign investors to buy Korean stocks and raises Korean stock prices. (The rest is omitted.) -
Can East Asia Emulate European Economic Integration?
The purpose of this paper is to provide a view on the current process and future prospects for regional financial and monetary cooperation in East Asia. Looking forward, financial cooperation in East Asia will be evolutionary. For..
Yung Chul Park et al. Date 2002.11.30
Economic integrationDownloadContentExecutive Summary
I. Introduction
II. Overview of the Chiang Mai Initiative (CMI)
III. Creation of Monitoring and Surveillance System
IV. Barriers to Financial Cooperation and Integration
V. Future Prospects
ReferencesSummaryThe purpose of this paper is to provide a view on the current process and future prospects for regional financial and monetary cooperation in East Asia. Looking forward, financial cooperation in East Asia will be evolutionary. For over a half century, European countries worked hard to develop various institutional frameworks which encouraged their cooperation on monetary and financial matters. If the European experience is any guide, it may take many years to develop effective cooperative arrangements and institutions in East Asia. However, there may be a breakthrough over the next few years as we gain a better understanding of the economic consequences of European monetary unification. The enlargement of the EU in 2004, when eight central and East European countries are expected to be admitted, will also have a large impact on the way East Asian policymakers think about regionalization in East Asia. -
Narrowing the Digital Gap in the APEC Region
The international digital gap has been a growing concern of the world today. The paper examines this issue in the context of APEC. Based on a statistical review of digitization performance over the period 1995-2000, it is claimed ..
Yoo Soo Hong Date 2002.11.30
Economic cooperationDownloadContentSummaryThe international digital gap has been a growing concern of the world today. The paper examines this issue in the context of APEC. Based on a statistical review of digitization performance over the period 1995-2000, it is claimed that the digital gap in the APEC region has improved or, at least, has not worsened. (The rest is omitted.) -
Has Trade Intensity in ASEAN+3 really Increased?
This study examines the observable phenomenon of growing trade intensity among the ASEAN+3 countries over the last twenty years by using a standard gravity approach. While there is a conventional belief that trade intensities with..
Heungchong Kim Date 2002.11.30
Trade structureDownloadContentSummaryThis study examines the observable phenomenon of growing trade intensity among the ASEAN+3 countries over the last twenty years by using a standard gravity approach. While there is a conventional belief that trade intensities within CJK (China, Japan and Korea) and between CJK and ASEAN have increased, we cannot find proper evidence that the relations have intensified over time beyond the gravity factors, considering the change of pattern in the gravity residuals. Moreover, with the exclusion of Hong Kong, the fitted trade flows projected by the gravity equation can explain most of the actual flows within CJK. With respect to the trade relations between CJK and ASEAN, substantial time-serial fluctuations in trade intensity disappear if the two entrepots of Hong Kong and Singapore are excluded. (The rest is omitted.) -
Reverse Sequencing: Monetary Integration ahead of Trade Integration in East Asia?
Regionalism is taking two forms. It is occurring firstly through free trade arrangements and secondly through monetary arrangements. These trade and monetary integration processes imply that geographically proximate countries hang..
Kwanho Shin et al. Date 2002.11.30
Free trade, Monetary policyDownloadContentI. Introduction
II. Europe's Experience: Trade Integration ahead of Monetary Integration
III. Is There Any Difference in East Asia?
IV. Does East Asia Satisfy Optimum Currency Area Criteria?
V. Introducing a Monetary Union ahead of FTA
VI. Conclusion
ReferencesSummaryRegionalism is taking two forms. It is occurring firstly through free trade arrangements and secondly through monetary arrangements. These trade and monetary integration processes imply that geographically proximate countries hang together to foster trade on the one hand and to manage intra-regional exchange rate stability on the other. These two processes interactively reinforce each other. (The rest is omitted.) -
Korea's Road to a Sound and Advanced Economy
The purpose of this conference is to identify policies to put Korea on the road to a sound and advanced economy. I will try to make my contribution to this discussion. but at the outset I want to emphasise that, given the wide-ran..
co-authors Date 2002.11.30
Economic development, Economic developmentDownloadContentSummaryThe purpose of this conference is to identify policies to put Korea on the road to a sound and advanced economy. I will try to make my contribution to this discussion. but at the outset I want to emphasise that, given the wide-ranging reforms introduced during the past five years, many of the problems that Korea now needs to overcome, or the new strengths it wishes to build, are also challenges for other OECD Members. Of course, there are still some exceptional issues for Korea. But for the most part the challenges to Korea today are similar to those in other OECD countries. And in some domains Korea is out in front leading the pack. -
Bailout and Conglomeration
This paper develops a model of business groups in emerging markets where banks do not have sufficient capability to accurately distinguish between good (or high productivity) and bad (or low productivity) borrower firms. However, ..
Se-Jik Kim Date 2002.11.20
Financial policy, Exchange rateDownloadContentSummaryThis paper develops a model of business groups in emerging markets where banks do not have sufficient capability to accurately distinguish between good (or high productivity) and bad (or low productivity) borrower firms. However, the bank can observe whether each firm repays on the repayment day, infer the probability of bad firms among the defaulted, and use liquidation as a screening device to select good firms. For stand-alone firms, the bank may find it optimal to liquidate all the defaulted, given that the chance of bad firms among the defaulted is large. In contrast, for business conglomerates, the optimal policy can be a full bailout since conglomeration, through cross debt payment guarantees, hinders the bank from obtaining information on the productivity of individual firms that is needed to sort out the firms to be liquidated. Expectation of such a bailout policy may encourage risk-averse firms to form a conglomerate to serve as an information-diluting device that helps eliminate the risk of liquidation. -
Korea's Trade Policy Regime in the Development Process
Korea's development strategy during the early stages was based on unskilled labor. Since the 1980s, however, it has focused on skilled labor and technology through the support of an aggressive liberalization policy. Specifically, ..
Nakgyoon Choi Date 2002.11.15
Trade policyDownloadContentSummaryKorea's development strategy during the early stages was based on unskilled labor. Since the 1980s, however, it has focused on skilled labor and technology through the support of an aggressive liberalization policy. Specifically, trade and financial liberalization policies were implemented to upgrade Korea's economic structure. Liberalization and deregulation polices were accelerated in order to overcome the financial crisis in the late 1990s. (The rest is omitted.) -
Currency Union in East Asia
Historically East Asian countries were integrated no less closely than those of the European Union before they lost the linkage between them in the early twentieth century, after being forcefully occupied by the western countries ..
Edit. Han Gwang Choo.Yunjong Wang Date 2002.11.10
Financial integrationDownloadContentSummaryHistorically East Asian countries were integrated no less closely than those of the European Union before they lost the linkage between them in the early twentieth century, after being forcefully occupied by the western countries and Japan. Recently the dynamism represented by the highly growing trade and investment volumes in the region is a major factor, playing an important role in recovering the lost linkage. (The rest is omitted.)