Economics Commons^™

Labour Market Reforms And Polarization In Korea, K. H., Raymond Chan

CAPS Working Paper Series

From the early 1990s the South Korean government launched a series of structural reforms to liberalize and deregulate the economy and labour market, in line with its globalization strategy. Particularly after the financial crisis, flexible labour market reform was one of the major initiatives to keep the Korean economy competitive in the global market. This paper describes the rationale for flexible labour market reforms in Korea from the early 1990s, evaluates their impacts on labour market polarization, and assesses the policy responses adopted by Kim Dae-jung and the current Roh Moo-hyun governments. It is argued that the flexible labour market …

The Economic Challenges For The New Chinese Leadership, Yue Ma, Ping Wang

CAPS Working Paper Series

"The Impact of China's Accession to the WTO" 中國入世後的初步分析

This paper will first review the early concerns about China's entry to the WTO. Then we will evaluate the preliminary impact of the WTO membership on the Chinese economy, which turned out to be better than expected. We also discuss the current international debate on the Chinese currency renminbi revaluation and suggest that a gradual improvement of the current Chinese rigid exchange rate system will be inevitable.

Finally we will explore the potential problems and challenges to both economies of mainland China and Hong Kong in the future. We argue that …

Structural Transformation And Economic Growth In Hong Kong : Another Look At Young's "A Tale Of Two Cities", Hiroyuki Imai

CAPS Working Paper Series

Young (A Tale of Two Cities, 1992 and the Tyranny of Numbers, 1995) demonstrated, based on the data from the 1960s to the 1980s, that the total factor productivity (TFP) growth since the mid-1980s owed much to the establishment of the cross-border division of labor in which Hong Kong relocated manufacturing to the Mainland and provided support and entrepot trade services in the form of service exports. Nevertheless, growth since the 1980s came largely from the declining manufacturing sector. The expanding services sector’s TFP growth, whether tradable or not, has been low. Hong Kong’s annual TFP growth rate dropped below …

Hong Kong's Inflation Under The U.S. Dollar Peg : The Balassa-Samuelson Effect Or The Dutch Disease?, Hiroyuki Imai

CAPS Working Paper Series

Despite establishing the U.S. dollar peg in 1983, Hong Kong’s annual rate of inflation during the 1985-96 period was 4.3% higher than that of the U.S. The Dutch disease is found to be the main reason for Hong Kong’s high long-term rate of inflation. The Balassa-Samuelson effect contributed relatively little. From the 1980s, the relocation of Hong Kong manufacturing to southern China generated strong demand for Hong Kong’s tradable services to support the industrial activity in the mainland and subsequently raised the process of tradable services in Hong Kong. Growing wage costs and consumption demand, which accompanied the boom led …

Testing For A Nonlinear Relationship Among Fundamentals And Exchange Rates In The Erm, Yue Ma, Angelos Kanas

CAPS Working Paper Series

We employ two nonparametric nonlinear testing methodologies, namely a nonparametric nonlinear cointegration approach and nonlinear Granger causality approach, to test for a nonlinear relationship between macroeconomic fundamentals and exchange rates for two country-pairs, namely the Netherlands-Germany and France-Germany. The result suggest that there is nonlinear cointegration among money, output and exchange rates for Netherlands-Germany, which can be interpreted as evidence of a long-run nonlinear relationship. For France-Germany, we fail to find evidence of nonlinear cointegration, but we find nonlinear Granger causality from French money to the FFr/DM exchange rate. These findings may be interpreted as evidence of a dynamic nonlinear …

The Labor Income Tax Equivalent Of Price Scissors In Pre-Reform China, Hiroyuki Imai

CAPS Working Paper Series

The government in a centrally planned economy can raise investable resources through price and wage manipulation. By treating price and wage controls as an implicit form of labor income taxation. I have assessed the scale of resource transfers from households to the government in pre-reform China. From the observed rise of the labor income share in the non-agricultural sector output resulting from price and wage liberalization since 1979, the implicit tax revenue during the 1964-78 period is assessed as 10.1 % of GDP. According to estimates based on a two-sector model, this implicit labor income tax led to implied reduction …

The Rise And Fall Of The Hk Economy, Lok Sang Ho

CAPS Working Paper Series

In this Chapter, I want to make a simple hypothesis. Hong Kong under the SAR Government had departed from the long-held recipe of success. The economic decline witnessed till the time of writing was the direct and immediate result of misguided government intervention, particularly in the property market. The nine-point rescue package announced on June 221998, however, showed that the SAR government might have learnt the lesson. In the absence of a full-hearted reversion to the old wisdom of positive nonintervention, however, the Hong Kong economy would continue to decline, and Hong Kong would lose its importance in the global …

中國貿易保護代價的測算 : 方法、結論和意義 = An Estimate Of The Welfare Cost Of Protection In China, Shuguang Zhang

CAPS Working Paper Series

本項研究是一項實証研究,目的在於計算中國貿易保護的程度和貿易自由化的福利效應, 並對計算結果進行初步分析和國際比較。

This study was sponsored by the Institute of International Economics in the United States. Jointly conducted by Zhang Shuguang, Zhang Yansheng, and Wan Zhongxin, it has estimated, for the first time, the elasticity of demand for 25 of China’s major import categories. It has also estimated the welfare cost of protection in China and has made comparison with that in other selected countries.

Coping With Contagion : Europe And The Asian Economic Crisis, Brian Bridges

CAPS Working Paper Series

No abstract provided.

Export Competitiveness Of China And Asean In The Us Market, Thomas J. Voon

CAPS Working Paper Series

This paper aims to provide a comparison of the changing pattern of export competitiveness among China and the four ASEAN countries comprising Indonesia, Malaysia, Singapore and Thailand (hereafter ASEAN-4) as exporters of primary commodities, labour-intensive goods as well as technology-intensive manufactures in the US market. Competitiveness is defined as country A’s ability to gain market share on a common export destination (such as the US import market). There are many popssible factors contributing to the changing level of competitiveness of a trading country. In this paper, we confine our analyss to evaluating how important relative changes in real exchange rate, …

Growth-Inflation Tradeoff In China, Hiroyuki Imai

CAPS Working Paper Series

The high growth and wide fluctuations of fixed investment are the main driving forces of the rate of inflation in China in the reform period. Investment expansion generates strong demand pressures in the consumption goods market. Its inflationary impact is magnified further as it brings about higher wage costs during a boom. An implied short-run tradeoff is derived from dynamic simulation of a small macroeconomics model. In a given year, each additional percentage point of economic growth or investment growth leads to, respectively, a 2.7 or a 0.9 percent increase in the rate of inflation that year.

Economic Reforms And Inequality In China, Joseph C. H. Chai, B. Karin Chai

CAPS Working Paper Series

This paper investigates the theoretical relationship between economic reforms and inequalities in socialist countries and tests it empirically in the case of China. The paper argues that the issue of whether market oriented reforms are likely to increase or decrease inequality in the former socialist economies is an empirical question which cannot be settled by a priori reasoning. On the one hand, economic inequality may rise with the reintroduction of property income and incentive payments and the reduction of barriers to opportunity for labor and capital to fully realize their highest earning potentials, On the other hand, inequality may decline …