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Currency
Crisis, Inflation and Stability of Demand for Broad Money:
The Case of Indonesia
--Boaz
Nandwa and Ramesh Mohan
In
the aftermath of the Asian financial crisis, there was widespread
concern among the Asian economies that this could potentially
have resulted in persistent inflation with volatile money
demand in the region. By employing multivariate cointegration
methodology, this paper examines the implication of currency
crisis on inflation and structural stability of demand for
broad money in Indonesia. Recursive estimation and diagnostic
tests were implemented to check parameter constancy across
regime changes over the period 1991-2004 . The results indicate
that controlling for structural breaks (except for 1997
and 1998) the demand for real broad money remained stable
in the aftermath of the currency crisis in Indonesia. Further,
the study finds evidence that changes in broad money, exchange
rate depreciation, and interest rates have a significant
impact on inflation inertia in Indonesia, both before and
after the currency crisis.
©
2008 IUP . All Rights Reserved.
Sovereign
Credit Ratings and Macroeconomic Variables: An Empirical
Analysis on Dynamic Linkages in Malaysia Using Bound Test
Approach
--Ahmad Abd Halim,
Mohd Daud Siti Nurazira and Marzuki Ainulashikin
The
paper investigates the long- and short-run relationship
between sovereign credit ratings and macroeconomic variables
in Malaysia by employing quarterly data from 1991 to 2004.
A robust and recent time series technique known as the Unrestricted
Error Correction Model—Bound Test was used which is
applicable irrespective of whether the regressors are I(0)
or I(1). The results show that in the long run, debt to
GDP, debt service to reserve and US Treasury Bill rate (3
months) appear to have a significant impact on Malaysia's
sovereign credit ratings. The findings of the study show
that Malaysia's long-term ability to pay its debt contains
information for the prediction of the credit ratings.
©
2008 IUP . All Rights Reserved.
Income
and Price Elasticities of Exports in Philippines
--Saten
Kumar
The
paper examines the elasticities of export demand for the
Philippines using Johansen time series technique. The results
of the study suggest that the income elasticity of exports
is unity and the relative price elasticity is significant
with expected sign. These long run income and relative price
elasticities have important implications for export growth
policies.
©
2008 IUP . All Rights Reserved.
The
Effects of Life Expectancy on Fiji's Output: A Time Series
Approach
--B Bhaskara Rao
and Fozia Nisha Razak
Compared
to several cross-country studies on the determinants of
growth, time series approaches are relatively few and limited
in scope. However, time series studies are useful for country-specific
policies. But in the recent time series works, with a few
exceptions, ad hoc specifications of output and growth equations
are used. This paper examines the specification and estimation
issues in the time series approach to the determinants of
output. Our approach is used to measure the effects of health
on the output of Fiji for the period 1970-2002.
©
2008 IUP . All Rights Reserved.
Input-Specific
Risk in HYV and Traditional Paddy Cultivation: An Analysis
of Agricultural Practices in Assam
--Phanindra Goyari
and Naresh Kumar Sharma
The
literature on the adoption of modern agriculture technology
reveals that several subjective and objective factors are
responsible for the incomplete adoption of High Yielding
Varieties (HYV) paddy seeds cultivation. Among many socioeconomic
factors acting on the incomplete adoption of HYV, the farmers'
perception of higher risk associated with HYV paddy cultivation
has been considered to be an important factor. This paper
examines the relative riskiness of HYV and traditional paddy
cultivation based on farm household level data in Assam.
An econometric estimation approach is adopted for this purpose.
A generalized stochastic production function approach and
the three-stage estimation procedure suggested by Just and
Pope (1979) are used on the sample data. The estimation
is done to examine the marginal effect of essential and
less essential inputs on the average yield and the variance
of yield in traditional and HYV paddy cultivation. Seeds,
labor, and capital are the essential inputs. Chemical fertilizers,
plant protection chemicals and irrigation from borewells
and pumpsets are treated as less essential inputs.
©
2008 IUP . All Rights Reserved.
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