Social and Behavioral Sciences Commons^™

Inflation And Inflation-Uncertainty In India: The Policy Implications Of The Relationship, Abdur Chowdhury

Abdur R. Chowdhury

Purpose – Inflation and its related uncertainty can impose costs on real economic output in any economy. This paper aims to analyze the relationship between inflation and inflation uncertainty in India. Design/methodology/approach – The methodology uses a generalized autoregressive conditional heteroscedasticity (GARCH) model and Granger Causality test. Findings – Initial estimates show the inflation rate to be a stationary process. The maximum likelihood estimates from the GARCH model reveal strong support for the presence of a positive relationship between the level of inflation and its uncertainty. The Granger causality results indicate a feedback between inflation and uncertainty. Research limitations/implications – …

The Economic Impact Of U.S. Foreign Direct Investment On The Asia Pacific Region, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.

Speculative Attacks Or Economic Fundamentals: Evidence From The Asian Currency Crisis, Abdur Chowdhury

Abdur R. Chowdhury

This paper argues that what led to the Asian financial crisis was a fatal combination of several self-reinforcing factors including external sector weaknesses, fragility in domestic financial markets due to inadequately administered financial liberalisation, loss of confidence, and short-term capital flows, maturing within less than a year and denominated in unhedged dollars. Some of these factors were country-specific while others were common to the entire region.

Asia's financial crisis will almost certainly lead to important changes in the international financial system, as countries try to find an appropriate balance between the benefits from gaining access to intentional capital flows and …

Money, Monetary Policy, Productivity And Inflation: A Dynamic Analysis, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.

The Velocity Of Us M2 In The 1990s: Some Further Evidence, Abdur Chowdhury, Mark Wheeler

Abdur R. Chowdhury

This paper investigates the behaviour of M2 velocity in recent years with special emphasis on the post-1989 period. Unlike previous studies in this area, M2 velocity is analysed in the context of a small vector autoregressive (VAR) model which includes income, prices, interest rates, and money growth volatility. The hypothesis of a structural shift in M2 velocity associated with the post-1989 period is rejected by the VAR model. This suggests that the unusual behaviour of M2 velocity since 1989 may be traced to the variability in its determinants, rather than to a shift in the process generating velocity. Variance decompositions …

Is Money More Productive In A Developing Economy?, Abdur Chowdhury, Yingqui Liu

Abdur R. Chowdhury

This paper tests the frequently cited hypothesis that money is more productive in a developing economy relative to a developed economy. Output elasticity of money is estimated for 20 countries over the 1977-92 sample period. These countries represent various stages of economic development. Two important conclusions can be derived from the results. First, irrespective of the monetary aggregate employed, the output elasticity of money is extremely low for all 20 countries. Second, the elasticity figure is sensitive neither to the stage of economic development in a particular country nor the period of time under consideration. Consequently, it can be argued …

Purchasing Power Parity In The Major Ems Countries: The Role Of Price And Exchange Rate Adjustment, Abdur Chowdhury, Fabio Sdogati

Abdur R. Chowdhury

In this paper we address the issue of whether the European Monetary System has contributed to real exchange rate stability between France, Germany, and Italy. We first ask whether bilateral PPP holds between any pair of these countries and between each of them and the United States. We find that PPP never holds before the EMS was created, and that it does among EMS countries, but not relative to the U.S. since. Next we assess the role of relative prices and exchange rates in the adjustment process toward PPP. We find that PPP between France and Germany is solely due …

The Demand For Money In A Small Open Economy: The Case Of Switzerland, Abdur Chowdhury

Abdur R. Chowdhury

The paper uses cointegration analysis to investigate the demand for money in Switzerland in the context of an open economy. It considers the general process of financial asset substitution and tests for the relevance of an exchange rate and a foreign interest rate variable in a conventional money demand equation. The results show that the variables entering into the demand for either monetary base or narrow money equation may not form a cointegrated system unless the exchange rate or foreign interest rate variable is included. This provides support to both the currency substitution and capital mobility hypotheses.

Review Of International Business: Competing In The Global Marketplace, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.

The Behavior Of Closed-End Country Fund Prices In The Asian Nies, Abdur Chowdhury

Abdur R. Chowdhury

This paper tests the impact of international investment restrictions on closed-end country funds in four Asian countries - Hong Kong, Korea, Singapore and Taiwan. The results show that the relationship between the premiums or discounts on closed-end country funds and announcements of changes in investment restrictions is sensitive to how individual countries respond to foreign innovations. A strong relationship exists in countries with large restrictions on investment - Korea and Taiwan. However, the relationship seems to break down in countries where there are virtually no restrictions on investment - Hong Kong and Singapore.

Political Surfing Over Economic Waves: Parliamentary Election Timing In India, Abdur Chowdhury

Abdur R. Chowdhury

This paper develops a political-economic interaction model for India for the 1960-91 sample period. India presents an ideal case for testing the political business cycle theory in the context of a parliamentary democracy with endogenous election timing. Using a mixed qualitative and continuous variable simultaneous equation estimation procedure, the paper considers the two-way interaction that results from the control by the cabinet over election timing. Several conclusions can be derived from this study. First, the results indicate the presence of business cycle-electoral interaction in India. Second, there is strong support for the surfing hypothesis, implying that the Indian cabinet tends …

Monetary Policy, Fiscal Policy And Aggregate Economic Activity: Some Further Evidence, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.

The Infant Mortality-Fertility Debate: Some International Evidence, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.

Mean Reverting Behavior Of Stock Returns: Evidence From A Panel Of Asian And Pacific Basin Countries, Abdur Chowdhury

Abdur R. Chowdhury

This study uses the seemingly-unrelated regression method in panel data to test for the mean-reversion behavior in stock returns in eight Asian and Pacific Basin markets: Hong Kong, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan, and Thailand. The empirical evidence suggests that an investor cannot use the information contained in stock performances in precious periods to consistently earn abnormal profits. A fundamental implication of the efficient market theory is that successive security returns are serially independent. Hence the empirical evidence is consistent with the spirit of the efficiency market theory. This would suggest a hands-off approach for the policy-makers with regard …

Review Of The Awakening Of The Soviet Union By Geoffrey Hosking, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.

Futures Market Efficiency: Evidence From Cointegration Tests, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.

Four Scenarios Of Development And The Role Of Economic Policy, Fabrizio Carmignani, Abdur Chowdhury

Abdur R. Chowdhury

We ask which economic policies can help a country create the most favourable conditions for development. We observe that the dynamics of several development indicators can be grouped into four clusters, each cluster corresponding to a different combination of growth and changes in inequality. Based on this observation, we define four different development scenarios and use limited dependent variable regressions to study how structural and policy factors affect a country's probability to achieve the most (or the least) favourable of these scenarios. Our results point to a comforting picture: through the choice of appropriate policies countries can effectively increase their …

(Wp 2011-04) Inflation And Inflation-Uncertainty In India: The Policy Implications Of The Relationship, Abdur Chowdhury

Abdur R. Chowdhury

Inflation and its related uncertainty can impose costs on real economic output in any economy. This paper analyzes the relationship between inflation and inflation uncertainty in India. Initial estimates show the inflation rate to be a stationary process. The maximum likelihood estimates from the GARCH model reveal strong support for the presence of a positive relationship between the level of inflation and its uncertainty. The Granger causality results indicate a feedback between inflation and uncertainty. With Granger causality running both ways, the Friedman-Ball and Cukierman-Meltzer hypotheses hold simultaneously in India. It provides strong support to the notion of an opportunistic …

A Note On Dominant Influence Of Fiscal Actions, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.

Monetary And Fiscal Policy As A Stabilization Tool: The Case Of Korea And Turkey, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.

Margin Requirement And Stock Market Volatility In Thailand, Abdur Chowdhury

Abdur R. Chowdhury

The use of margin requirements as a potential policy tool for controlling sudden stock price changes and market volatility has attracted considerable attention in the developed stock markets. However, no consensus has emerged regarding the significance of the impact of changes in margin requirement of the stock market. The existing analyses are extended to test the impact of changes in margin requirements on stock prices in an emerging stock market. Using recent data from the Stock Exchange of Thailand, margin requirements are demonstrated to have an important impact on the behaviour of stock prices. Increases (decreases) in margin requirements usually …

Banking Reform In Russia: Winds Of Change?, Abdur Chowdhury

Abdur R. Chowdhury

Only a successful implementation of an overall reform program will enable Russian banks to provide financial intermediation and assist in the country's development from a nascent market economy to a mature financial system. The chances for reform are better now than at any time during the last decade. Favorable political and economic conditions and a change in attitude among bank management have created an unusual window of opportunity. The paper analyzes the past performance of the Russian banking industry, evaluates the reform agenda of the monetary authority, and argues for an overall reform program in order to seize the available …

Velocity And The Variability Of Money Growth: Some International Evidence, Abdur Chowdhury

Abdur R. Chowdhury

Using data from four countries, the paper tests Friedman's hypothesis that the volatility of money growth causes velocity to change. Despite a wide variety of patterns in the movements of velocity in these countries, support is evident for the hypothesis.

Fiscal Dependence On Trade Tax And The Level Of Economic Development, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.

Stock Market Interdependencies: Evidence From The Asian Nies, Abdur Chowdhury

Abdur R. Chowdhury

National asset markets have become more integrated in recent years. This paper investigates the interrelationship, if any, among the stock markets in four newly industrialized economies (NIEs) in Asia. The results indicate that a significant link exists between the stock markets of Hong Kong and Singapore and those of Japan and the United States. On the other hand, the markets with severe restrictions on cross-country investing, that is, Korea and Taiwan, are not responsive to innovations in foreign markets. Finally, the United States stock market influences, but is not influenced by, the four Asian markets.

Money In The Yugoslav Economy, Abdur Chowdhury, Stephen Grubaugh, Andrew Stollar

Abdur R. Chowdhury

No abstract provided.

Til Recession Do Us Part: Booms, Busts, And Divorce In The United States, Abdur Chowdhury

Abdur R. Chowdhury

A general hypothesis regarding the impact of permanent income levels and business cycle fluctuations on divorce rate at the state level in the United States is analysed in this article. Based on the data for 45 states over the sample period of 1978–2009, it is shown that the higher the level of transitory income, the higher the incidence of divorce. In other words, divorce is pro-cyclical.

The Impact Of Financial Openness On Economic Integration: Evidence From Europe And The Cis, Fabrizio Carmignani, Abdur Chowdhury

Abdur R. Chowdhury

We study whether financial openness facilitates the economic integration of formerly centrally planned economies with the EU-15. Two dimensions of economic integration are considered: cross-country convergence of per-capita incomes and bilateral trade in goods and services. We find that more financially open economies effectively catch-up faster and trade more with the EU-15. These integration-enhancing effects occur over and above any effect stemming from domestic financial deepening and other factors determining growth and trade.

Economic Policies In Transition, Abdur Chowdhury, Iikka Korhonen

Abdur R. Chowdhury

No abstract provided.

Are Causal Relationships Sensitive To Causality Tests?, Abdur Chowdhury

Abdur R. Chowdhury

No abstract provided.