With the rise of the People’s Republic of China (PRC) as the world’s largest trading nation (measured by trade value) and second largest economic power (measured by GDP), its economic influence over the neighboring emerging economies in East Asia has also risen. The PRC introduced...

This paper examines whether changes in exchange rate arrangements have affected monetary independence in East Asian countries after the 1997 Asian crisis. We find that the sensitivity of local to U.S. interest rates has declined for many Asian countries since they adopted floating exchange rate...

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)...

Even though globalization benefits less developed countries (LDCs), it also makes them more vulnerable to the exogenous shocks to the economies. Many LDCs rely on imported technologies and intermediate inputs to compete in the international export markets with better quality and cost efficient...

The monetary policy and exchange rate regime that served Korea well for many years ended in crisis in 1997. The regime that collapsed was characterized by a tightly managed nominal exchange rate and domestic financial markets that were controlled by the government and largely closed to...

We develop a new set of indexes of exchange rate stability, monetary policy independence, and financial market openness as the metrics for the trilemma hypothesis. In our exploration, we take a different and more nuanced approach than the previous indexes developed by Aizenman, Chinn, and Ito...

The evolution of volatility and correlation patterns of the Malaysian ringgit and the Singapore dollar are analyzed in this paper. Our approach can simultaneously capture the empirical regularities of persistent and asymmetric effects in volatility and time-varying correlations of financial time...

Japans prolonged recession over the last five years has provided the impetus for regulatory reform and industry restructuring. Historically, the flow of Foreign Direct Investment (FDI) into Japan has been small for an economy of its size. The high degree of vertical integration and relatively...

In the run-up to the financial crisis, the world economy was characterized by large and growing current account imbalances. Since the onset of the crisis, the People’s Republic of China and the United States have rebalanced. As a share of gross domestic product, their current account...

We investigate the determinants of currency choice for trade invoicing in a cross-country context while focusing on the link between capital account liberalization and its impact on the use of the renminbi (RMB). We find that while countries with more developed financial markets tend to invoice...