A computable general equilibrium model is used to evaluate the economic effects of a free trade agreement among China, Japan, and South Korea on the world economy. This study is focused on estimating trade creation and diversion effects of the FTA. Results show that there are strong trade...

This study examines the reactions of the Union of South American Nations (UNASUR) economies to external shocks. By using a structural vector autoregression approach, it measures the impact of three external shocks (monetary, commercial, and financial) in the real, monetary, and fiscal economic...

Turkey has become the dominant recipient of FDI inflows in the Western Asian region. We explore if such inflows have promoted growth as expected. Our analysis of the FDI/growth nexus focuses both on the long-and short-run relations and allows for the possibility that growth also responds to...

This paper aims to empirically examine the determinants that influence the investment decisions of firms in East Asia, a region that propelled its growth through a predominantly export-led industrialization strategy. Empirical results suggest that a firm¡¯s cash flow, representing internal...

I use disaggregated good prices data for U.S. and Mexican cities for nine categories of consumer prices to estimate the ¡°border effect¡¯ on U.S. - Mexican relative price and find that for all the categories of goods it is an order of magnitude larger than for U.S. - Canadian prices (13.22...

One recent line of research on exchange rates is the effect of fixed or floating currencies on long-term growth. One difficulty with such studies is that emerging market countries with certain imbalances and potentially hard-to-observe policy distortions are more likely to choose a fixed...

This paper examines the effects of exchange rate fluctuations on real output growth and price inflation in a sample of twenty-two developing countries. The analysis introduces a theoretical rational expectation model that decomposes movements in the exchange rate into anticipated and...

This paper uses a model calibrated to suit a small open Asian economy to present a series of counterfactual policy experiments aimed at comparing conventional optimal inflation targeting (IT) under commitment and discretion and variations of simple fixed monetary policy rules (MPRs). Two...

The last few decades have witnessed a significant influx of direct foreign investment in developing countries. The increased flow of foreign investment has contributed to the ability of developing countries to produce import competing manufactured goods by combining imported and domestically...

This paper investigates the extent of pass-through from the nominal exchange rate to import prices for a sample of nineteen African countries. The methodology is based on panel data cointegration testing. Using annual data extending back to 1971, long-run pass-through can be best described as a...