By looking at how an East Asian currency moves when the yen fluctuates sharply against the US dollar, we sometimes find that the reaction has been much more significant than would be suggested by the econometric estimates of the weight of the yen in nominal exchange rate determination. Moreover,...

This paper examines some of the key issues in the conduct of Philippine monetary policy since 1984, including the various shocks to the economy and the monetary authorities’ choice of intermediate policy targets and instruments used to achieve those targets. Against this background, estimates...

Following the 1997-98 financial turmoil, crisis countries in Asia moved toward either floating or fixed exchange rate systems, reinforcing the bipolar view of exchange rate regimes and the ""hollow middle"" hypothesis. But some academics have claimed that the crisis countries'' policies have...

A bivariate vector-autoregression (VAR) model is used to test causal relations between the current account and the capital account in four emerging market economies. The results show that high capital mobility could be a major cause of current account instability. Therefore, macroeconomic policy...