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Articles 1 - 30 of 30
Full-Text Articles in Macroeconomics
Common Bubble Detection In Large Dimensional Financial Systems, Ye Chen, Peter C. B. Phillips, Shuping Shi
Common Bubble Detection In Large Dimensional Financial Systems, Ye Chen, Peter C. B. Phillips, Shuping Shi
Research Collection School Of Economics
Price bubbles in multiple assets are sometimes nearly coincident in occurrence. Such near-coincidence is strongly suggestive of co-movement in the associated asset prices and is likely driven by certain factors that are latent in the financial or economic system with common effects across several markets. Can we detect the presence of such common factors at the early stages of their emergence? To answer this question, we build a factor model that includes I(1), mildly explosive, and stationary factors to capture normal, exuberant, and collapsing phases in such phenomena. The I(1) factor models the primary driving force of market fundamentals. The …
Inflation Dynamics And Expectations In Singapore, Hwee Kwan Chow-Tan
Inflation Dynamics And Expectations In Singapore, Hwee Kwan Chow-Tan
Research Collection School Of Economics
Inflation dynamics in Singapore have primarily been shaped by foreign factors, including global inflationary pressures and external macroeconomic shocks. More recently, the normalisation phase of the Covid-19 pandemic crisis has led to domestic price pressures from pent-up demand and supply-chain disruptions. Meanwhile, the war in Ukraine has resulted in a hike in the global prices of food, energy, and industrial commodities. Using inflation forecasts from the MAS Survey of Professional Forecasters as our measure of inflation expectations, we show that short-term inflation expectations have shifted up recently. Moreover, greater disagreement amongst survey respondents in the more recent surveys suggests individual …
Economic Forecasting In Singapore: The Covid-19 Experience, Hwee Kwan Chow-Tan, Keen Meng Choy
Economic Forecasting In Singapore: The Covid-19 Experience, Hwee Kwan Chow-Tan, Keen Meng Choy
Research Collection School Of Economics
This Special Feature considers how accurately professional forecasters have predicted GDP growth and inflation in Singapore, especially during rare events such as the Global Financial Crisis (GFC) and COVID-19. It also illustrates the value of forecast probability distributions in inferring forecasters’ uncertainty when making predictions, and the degree of consensus between projections from different forecasters. The authors find that one-year ahead forecast errors for GDP growth and inflation increased during the GFC and the COVID-19 pandemic. While professional forecasters did not appear to have followed the Government’s forecasts when predicting growth during the GFC, they may have exhibited ”leader-following” behaviour …
The Exchange Rate System Reform In China: Some Important Results, Paul S. L. Yip, Yiu Kuen Tse, Yingjie Dong
The Exchange Rate System Reform In China: Some Important Results, Paul S. L. Yip, Yiu Kuen Tse, Yingjie Dong
Research Collection School Of Economics
We provide a review and empirical study on the exchange rate system reform in China. In the initial stage of the reform the Chinese central bank PBoC's implicit promise of gradual appreciation helped to contain the appreciation rate and volatility of the renminbi. Subsequently, under US pressure for faster appreciation and hence the PBoC's moderate violation of the implicit promise, there was a significant rise in the appreciation rate and the volatility of the renminbi. The moderate violation deteriorated further, forming a vicious cycle of speculative flows and faster exchange rate changes. Upon the onset of the global financial crisis …
Connectedness Of Asia Pacific Forex Markets: China's Growing Influence, Hwee Kwan Chow
Connectedness Of Asia Pacific Forex Markets: China's Growing Influence, Hwee Kwan Chow
Research Collection School Of Economics
This paper investigates the degree of connectedness of Asia Pacific forex markets post global financial crisis and relates it to developments in the renminbi markets. The connectedness measure developed by Diebold and Yilmaz (2014) reveal the strength of linkages across the US dollar currency pairs of twelve currencies, namely offshore renminbi, onshore renminbi, euro, yen, Australian dollar, Indian rupee, Korean won, Malaysian ringgit, New Zealand dollar, Singapore dollar, Thai baht and Taiwan dollar. With the gradual liberalization of China’s exchange rate system, shocks from the renminbi markets contribute more to fluctuations in almost all individual Asia Pacific currency markets vis-a-vis …
Invitation Strategy For Cutting Edge Industries Through Mncs And Global Talents: The Case Of Singapore, Kim Song Tan
Invitation Strategy For Cutting Edge Industries Through Mncs And Global Talents: The Case Of Singapore, Kim Song Tan
Research Collection School Of Economics
Singapore presents an interesting case of how a country achieves dynamic economic development and innovation through the "invitation" strategy of a business hub. Despite being a small city-state with limited domestic market size and no meaningful hinterland or natural resources to speak of, Singapore has managed to transform its economy dramatically over the past 50 years by leveraging the strengths of other economies. Specifically, it has been able to attract (or "invite") various types of productive resources, including foreign capital, foreign technology and foreign workers (both skilled and unskilled) to make up for what it lacks. This has helped Singapore …
Impact Of International Remittances On Schooling In The Philippines: Does The Relationship To The Household Head Matter?, Tomoki Fujii
Impact Of International Remittances On Schooling In The Philippines: Does The Relationship To The Household Head Matter?, Tomoki Fujii
Research Collection School Of Economics
We study the impact of international remittances on schooling in the Philippines, taking into account the school-age individual's relationship to the household head. This consideration is important because employment opportunities abroad may be taken at the expense of the quality of child rearing. Our estimation results indicate that there are, indeed, significant negative guardian effects on school attendance and education expenditures when children with overseas parents are looked after by a relative other than a parent or grandparent. However, these negative effects tend to be outweighed by the positive impact of remittance flows from overseas.
The Role Of The State In Singapore: Pragmatism In Pursuit Of Growth, Kim Song Tan, Manu Bhaskaran
The Role Of The State In Singapore: Pragmatism In Pursuit Of Growth, Kim Song Tan, Manu Bhaskaran
Research Collection School Of Economics
This paper looks at how government intervention shapes the evolution of the Singapore economy and accounts for its successes and failures over the past 50 years. Compared with other dynamic Asian economies, the Singapore government's approach to intervene in the economy is both more extensive and more intrusive, but with a narrow focus on GDP growth and surplus accumulation as the primary objectives. The ruling government's near complete dominance in politics has enabled it to mobilize resources to create the preconditions for strong GDP growth and high savings. But the impact on the broader development of the economy and the …
China's Yuan: Asia's Future Anchor Currency?, Hwee Kwan Chow
China's Yuan: Asia's Future Anchor Currency?, Hwee Kwan Chow
Research Collection School Of Economics
The yuan is becoming more widely used in pricing and settling intra-regional trade and investment. Asian currencies' movements are likely to shift more in tandem with the yuan, leading to it becoming one of Asia's lead currencies. Singapore is now the world's second-most- important offshore yuan trading hub after Hong Kong.
Detecting Bubbles In Hong Kong Residential Property Market, Matthew S. Yiu, Jun Yu, Lu Jin
Detecting Bubbles In Hong Kong Residential Property Market, Matthew S. Yiu, Jun Yu, Lu Jin
Research Collection School Of Economics
This study uses a newly developed bubble detection method (Phillips, Shi, and Yu, 2011) to identify real estate bubbles in the Hong Kong residential property market. Our empirical results reveal several positive bubbles in the Hong Kong residential property market, including one in 1995, a stronger one in 1997, yet another one in 2004, and a more recent one in 2008. In addition, the method identifies two negative bubbles in the data, one in 2000 and the other one in 2001. These empirical results continue to be valid for the mass segment and the luxury segment. However, this method has …
Policy Responses In An Unstable Globalized Economy: Multi-Stressed Low-Earning Families In Singapore, Irene Y. H. Ng, Kong Weng Ho
Policy Responses In An Unstable Globalized Economy: Multi-Stressed Low-Earning Families In Singapore, Irene Y. H. Ng, Kong Weng Ho
Research Collection School Of Economics
The Singapore government responded swiftly to the 2008 global recession, doling out a range of policies in aid of all levels of wage earners. This paper explores the impacts of economic trends and government policies on low-wage earners. Using a theoretical model and empirical data from a pilot study of recipients of a government Work Support Program, it demonstrates the effects of socioeconomic factors on multi-stressed low-earning families. It discusses the adequacy of current policies in addressing the multiple stressors experienced by low-wage earners.
Decomposing The Changes Of The Divisia Price Index: Application To Inflation In The Philippines, Tomoki Fujii
Decomposing The Changes Of The Divisia Price Index: Application To Inflation In The Philippines, Tomoki Fujii
Research Collection School Of Economics
We decompose the logarithmic change in the Divisia price index into the pure price, substitution, and preference effects, although the latter two effects are hard to distinguish in practice. This decomposition allows us to identify the incidence and contributing factors of inflation. In the Philippines, we find that the preference effect is much smaller than the pure price effect in all provinces. We also find that rich deciles have experienced a higher inflation than poor deciles between 1988 and 2006. However, the gap in the standards of living has actually widened because poor deciles lagged behind in consumption growth.
Singapore Inflation Expectations: Expecting The Unexpected, Aurobindo Ghosh, Jun Yu
Singapore Inflation Expectations: Expecting The Unexpected, Aurobindo Ghosh, Jun Yu
Research Collection School Of Economics
The study of inflation expectations of Singapore house-holds is a multi-disciplinary industry-relevant research that comes out of a partnership between Singapore Management University (SMU) and MasterCard. The research team for this MasterCard-SKBI Singapore Index of Inflation Expectations (SInDEx) project applied rigorous methods using current internet-based marketing survey tools for data-collection and advanced econometric techniques to analyse the data. The updates from the quarterly waves are keenly followed by policymakers, market watchers and the media because of the enormous importance of cost of living to individuals and businesses alike.
Detecting Bubbles In Hong Kong Residential Property Market, Matthew S. Yiu, Jun Yu, Lu Jin
Detecting Bubbles In Hong Kong Residential Property Market, Matthew S. Yiu, Jun Yu, Lu Jin
Research Collection School Of Economics
This study uses a newly developed bubble detection method (Phillips, Shi and Yu, 2011) to identify real estate bubbles in the Hong Kong residential property market. Our empirical results reveal several positive bubbles in the Hong Kong residential property market, including one in 1995, a stronger one in 1997, another one in 2004, and a more recent one in 2008. In addition, the method identifies two negative bubbles in the data, one in 2000 and the other one in 2001. These empirical results continue to be valid for the mass segment and the luxury segment. However, the method finds a …
Singapore Consumer’S Inflation Expectations And Creation Of Singapore Index Of Inflation Expectations, Aurobindo Ghosh, Jun Yu
Singapore Consumer’S Inflation Expectations And Creation Of Singapore Index Of Inflation Expectations, Aurobindo Ghosh, Jun Yu
Research Collection School Of Economics
The aim of this report is to highlight a broad spectrum of issues that brings about the measurement of the disagreement and the uncertainity and the formation of inflation expectations among economic agents in Singapore.
Decomposing The Changes Of The Divisia Price Index: Application To Inflation In The Philippines, Tomoki Fujii
Decomposing The Changes Of The Divisia Price Index: Application To Inflation In The Philippines, Tomoki Fujii
Research Collection School Of Economics
We propose a method to decompose the logarithmic change of the Divisia price index into the pure price effect, the preference effect and the substitution effect. Our empirical results in the Philippines shows the effects of preference change on the Divisia price index are heterogeneous but positive across all regions and income deciles. However, they are dominated by the pure price effect.
Analyzing And Forecasting Business Cycles In A Small Open Economy: A Dynamic Factor Model For Singapore, Hwee Kwan Chow, Keen Meng Choy
Analyzing And Forecasting Business Cycles In A Small Open Economy: A Dynamic Factor Model For Singapore, Hwee Kwan Chow, Keen Meng Choy
Research Collection School Of Economics
A dynamic factor model is applied to a large panel dataset of Singapore’s macroeconomic variables and global economic indicators with the initial objective of analysing business cycles in a small open economy. The empirical results suggest that four common factors – which can broadly be interpreted as world, regional, electronics and domestic economic cycles – capture a large proportion of the co-variation in the quarterly time series. The estimated factor model also explains well the observed fluctuations in real economic activity and price inflation, leading us to use it in forecasting Singapore’s business cycles. We find that the forecasts generated …
Asian Currency Baskets: An Answer In Search Of A Question?, Charles Adams, Hwee Kwan Chow
Asian Currency Baskets: An Answer In Search Of A Question?, Charles Adams, Hwee Kwan Chow
Research Collection School Of Economics
This paper considers how a regional currency basket and the associated divergence indicators could be used in official surveillance. Recently, proponents of Asian currency baskets have referred to the role the ECU played in constructing exchange rate divergence indicators in Europe as evidence of the intrinsic usefulness of currency baskets for exchange rate monitoring. We show in this paper a number of problems with the use of regional currency-basket based divergence indicators. First, at a technical level, such indicators involve tracking regional exchange rates against a moving currency basket and can obscure underlying movements in bilateral exchange rates. Second, currency …
Misaligned Incentives And Mortgage Lending In Asia, Richard Green, Roberto S. Mariano, Andrey Pavlov, Susan Wachter
Misaligned Incentives And Mortgage Lending In Asia, Richard Green, Roberto S. Mariano, Andrey Pavlov, Susan Wachter
Research Collection School Of Economics
This paper provides a conceptual basis for the price discovery potential for tradable market instruments and specifically the development of mortgage securitization in Asia and the potential dangers of such markets. Nonetheless we argue for the potential importance of securitization in Asia because of its possible role in increasing transparency of the financial sector of Asian economies. We put forth a model explaining how misaligned incentives can lead to bank generated real estate crashes and macroeconomic instability, with or without securitization under certain circumstances. We examine the banking sector’s performance in Asia compared to securitized real estate returns, to provide …
Analyzing And Forecasting Business Cycles In A Small Open Economy: A Dynamic Factor Model For Singapore, Hwee Kwan Chow, Keen Meng Choy
Analyzing And Forecasting Business Cycles In A Small Open Economy: A Dynamic Factor Model For Singapore, Hwee Kwan Chow, Keen Meng Choy
Research Collection School Of Economics
A dynamic factor model is applied to a large panel dataset of Singapore’s macroeconomic variables and global economic indicators with the initial objective of analyzing business cycles in a small open economy. The empirical results suggest that four common factors are present in the quarterly time series, which can broadly be interpreted as world, regional, electronics and domestic economic cycles. The estimated factor model explains well the observed fluctuations in real economic activity and price inflation, leading us to use it in forecasting Singapore’s business cycles. We find that the forecasts generated by the factors are generally more accurate than …
Singapore's Exchange Rate Policy: Some Implementation Issues, Hwee Kwan Chow
Singapore's Exchange Rate Policy: Some Implementation Issues, Hwee Kwan Chow
Research Collection School Of Economics
Reflecting the small open nature of its economy, Singapore has adopted an exchange rate-centered monetary policy framework since 1981. The exchange rate regime in Singapore is an intermediate regime that follows the basket-band-crawl system. With this managed float system, the MAS has successfully deterred speculators from attacking the domestic currency for most of the past three decades. At the same time, the flexibility accorded by the managed float system aided Singapore in escaping from the 1997–1998 Asian crisis relatively unscathed. In order to advance our understanding of the hitherto successful operation of Singapore's exchange rate policy, we examine the following …
Characterizing Exchange Rate Policy In East Asia: A Reconsideration, Hwee Kwan Chow, Yoonbai Kim, Wei Sun
Characterizing Exchange Rate Policy In East Asia: A Reconsideration, Hwee Kwan Chow, Yoonbai Kim, Wei Sun
Research Collection School Of Economics
Frankel and Wei (1994) developed and popularized a method for uncovering the implicit weights assigned to major international currencies constituting a currency basket. We extend the methodology in two dimensions: include regional competitive pressure and employ a vector autoregressive (VAR) model to overcome simultaneity bias. With these modifications, we confirm the prominent role of the US dollar in the exchange rate policy of East Asian economies beyond the short run. However, despite the high degree of commitment to nominal exchange rate stability prior to the crisis, fluctuations in most East Asian currencies are also significantly influenced by country specific shocks. …
Financial Liberalization And Monetary Policy Cooperation In East Asia, Hwee Kwan Chow, Peter N. Kriz, Roberto S. Mariano, Augustine H. H. Tan
Financial Liberalization And Monetary Policy Cooperation In East Asia, Hwee Kwan Chow, Peter N. Kriz, Roberto S. Mariano, Augustine H. H. Tan
Research Collection School Of Economics
As the countries in East Asia embark on financial liberalization, a key issue that confronts policymakers is the greater complexity of risks that is injected into the financial system. In particular, capital account liberalization may potentially increase the vulnerability of individual countries to external financial shocks. This paper advocates the optimally cascading of financial liberalization that is consistent across three dimensions: extent of domestic financial liberalization; the degree of exchange rate flexibility; and the scope of capital account liberalization. Unless the process of liberalization is properly managed, it could provoke destabilizing capital flows and lead to volatile exchange rates. Smooth …
Asian Currency Baskets: A Useful Surveillance Tool?, Charles Adams, Hwee Kwan Chow
Asian Currency Baskets: A Useful Surveillance Tool?, Charles Adams, Hwee Kwan Chow
Research Collection School Of Economics
This paper considers whether an intra-regional currency basket and the associated divergence indicators could play a useful role in official exchange rate surveillance. Recently, proponents of an Asian currency basket have referred to the role the European Currency Unit played in constructing exchange rate divergence indicators as evidence of the usefulness of intra-regional currency baskets for exchange rate monitoring. The paper shows that such indicators have a number of features that can lead to them obscuring underlying changes in exchange rates and that the signals they emit will often be difficult to interpret. In addition, the use of regional currency …
Growth Accounting For A Follower-Economy In A World Of Ideas: The Example Of Singapore, Kong Weng Ho, Hian Teck Hoon
Growth Accounting For A Follower-Economy In A World Of Ideas: The Example Of Singapore, Kong Weng Ho, Hian Teck Hoon
Research Collection School Of Economics
In this paper, we take another approach to accounting for the sources of Singapore’s economic growth by being explicit about the channels through which Singapore, as a technological follower, benefits from international R&D spillovers. Taking into account the channels through which technology developed in the G5 countries diffuses to technological followers, we show that 57.5 percent of Singapore’s real GDP per worker growth rate over the 1970-2002 period is due to multifactor productivity growth. In particular, about 52 percent of the growth is accounted for by an increase in the effectiveness of accessing ideas developed by the technology leaders through …
Central Asia's Transition After Fifteen Years: Growth And Policy Choices, Malcolm Dowling, Ganeshan Vignaraja
Central Asia's Transition After Fifteen Years: Growth And Policy Choices, Malcolm Dowling, Ganeshan Vignaraja
Research Collection School Of Economics
This paper presents a coherent and systematic analysis of the collapse and subsequent revival of the Central Asian Republics (CARs) since 1990. The focus is on the pattern of growth and structural change during the cycle of decline and subsequent revival in the CARs which have been inadequately analyzed in the literature on transition. The paper relates economic performance to initial conditions, country characteristics and policies. Within this framework, it proposes a simple typology of policies (including a new Type III set of policies on regional cooperation and industrial competitiveness) and relates them to the cycle of decline and revival …
Central Asia: Mapping Future Prospects, Malcolm Dowling, Ganeshan Wignaraja
Central Asia: Mapping Future Prospects, Malcolm Dowling, Ganeshan Wignaraja
Research Collection School Of Economics
Central Asia has emerged as one of the world’s fastest growing regions since the late 1990s and has shown notable development potential. This is significant for a region comprising largely of small landlocked economies with no access to the sea for trade. Among the advantages, of the region are its high- priced commodities (oil, gas, cotton and gold), reasonable infrastructure and human capital as legacies of Soviet rule; and a strategic location between Asia and Europe. Furthermore, many Central Asian Republics (CARs) have embarked on market-oriented economic reforms to boost economic performance and private sector competitiveness. Central Asia: Mapping Future …
China's Changing Economic Structures And Its Implications For Regional Patterns Of Trade Production And Integration, Kim Song Tan, Hoe Ee Khor
China's Changing Economic Structures And Its Implications For Regional Patterns Of Trade Production And Integration, Kim Song Tan, Hoe Ee Khor
Research Collection School Of Economics
There is tremendous momentum for economic and financial integration in East Asia today. Partly inspired by the formation of the European Union and partly as a response to the 1997/98 Asia financial crisis, many East Asian countries are showing greater commitment to regional economic cooperation. A number of bilateral free trade agreements (FTAs) have either been concluded or are being negotiated.1 At a less formal level, the ASEAN+3 grouping has brought the whole region together in regular consultations over trade, investment, as well as monetary and exchange rate policy matters.
A Var Analysis Of Singapore's Monetary Transmission Mechanism, Hwee Kwan Chow
A Var Analysis Of Singapore's Monetary Transmission Mechanism, Hwee Kwan Chow
Research Collection School Of Economics
The Singapore economy has experienced greater business cycle fluctuations in recent years, being subject to recurrent shocks from the external environment. Given the extreme openness of the economy—Singapore’s export share of GDP is approximately 180%—it is not surprising that the main cause of the increase in economic volatility is a rise in the frequency and magnitude of exogenous shocks. These include the downswing in the global electronics industry in 1996–97, the Asian financial crisis in 1997–98, the burst of the information technology bubble in 2001, and the outbreak of the SARS respiratory disease in 2003. Such a close sequence of …
Markov Chains In Predictive Models Of Currency Crises - With Applications To Southeast Asia, Roberto S. Mariano, Abdul G. Abiad, Gultekin Bulent, Tayyeb Shabbir, Augustine H. H. Tan
Markov Chains In Predictive Models Of Currency Crises - With Applications To Southeast Asia, Roberto S. Mariano, Abdul G. Abiad, Gultekin Bulent, Tayyeb Shabbir, Augustine H. H. Tan
Research Collection School Of Economics
The decade of the 1990s was marked by an unusual number of financial and economic crises such as the attack on the European Monetary System in 1992-93, the Mexican peso crisis in 1994-95, the Asian crisis in 1997, the Russian default in 1998 and its spillover to Latin America. The Turkish currency and banking crisis in 2001 and the recent difficulties in Argentina indicate that financial crises are still part of the current economic events. In the wake of such developments, there has been a resurgence of interest in early warning systems that can anticipate the likely occurrence of such …