In this paper a fiscal consolidation program for India has been presented based on a policy simulation model that enables us to examine the macroeconomic implications of alternative fiscal strategies, given certain assumptions about other macro policy choices and relevant exogenous factors. The...

Lucas (1976) argued that interventionist policies in macroeconomics may fail because the policies themselves affect the optimal behavior of private agents and hence the associated response parameters. We extend Lucas's argument and propose that a highly controlled and regulated environment leads...

In recent economic geography, it is emphasized that the effect of cost decreasing in transportation on agglomeration is nonlinear. It is said that the influence of traffic infrastructure investment and the change in transportation cost on urban agglomeration does not appear until the cost is...

This paper examines the viability or appropriateness of two polar solutions, especially free-floating regime for developing countries. To do so, we investigate the Korean financial markets, which provide interesting case, utilizing multivariate GARCH and various VSR (Vector Auto-Regression)...

We develop a model of asset trading with financial leverage in an economy with a continuum of investors. The investors are assumed to have diverse and rational beliefs in the sense of being compatible with observed data. We show that an increase in leverage ratio may cause the stock price to...

This paper seeks to add to the current debate about financial development and growth in the emerging world by looking at how different financial systems evolve : how and why financial structures change during various stages of development, how best to measure them, and seeing what practical...

This paper discusses mechanisms to prevent and resolve foreign exchange crises in East Asia. Policies and mechanisms at the country level as well as regional and global levels are discussed. Policies at the level of a particular country to prevent foreign exchange crises include the management...

The paper analyzes the financial crisis of through the lens of market failures and regulatory failures. We present a case that there were four primary failures contributing to the crisis : excessive risk-taking in the financial sector due to mispriced government guarantees; regulatory focus on...

The recent financial crisis has shown that financial innovation can have devastating systemic impacts. International standard setters’ and national regulators’ response has been a global concerted effort to overhaul and tighten financial regulations....

This paper seeks to add to the current debate about financial development and growth in the emerging world by looking at how different financial systems evolve : how and why financial structures change during various stages of development, how best to measure them, and seeing what practical...