Despite the phenomenal development in stock markets in China, there is little research on the linkage between stock prices and economic growth in Greater China: mainland China, Hong Kong and Taiwan. This article represents a step towards systematically investigating the relationship between...

This paper develops a calibrated DSGE model for simulating China’s monetary policy and macroprudential policy. The empirical results show, first, that the interest rate is a better instrument for China’s monetary policy than the required reserve ratio when the central bank is solely...

Understanding how import prices adjust to exchange rates helps anticipate inflation effects and monetary policy responses. This article examines exchange rate pass-through to the monthly import price index in South Africa during 1980-2009. Short-horizon pass-through estimates are calculated...

We develop a two-period model where a risk-averse entrepreneur decides on the size of an investment project and how to finance it. He can use debt and/or equity finance; an incentive compatibility constraint limits the extent to which the project can be financed with equity. With debt, he may, in...

Despite the increasing role of foreign direct investment (FDI) in economic development, very limited research has been carried out on the causal links between trade, FDI and economic growth in Asian economies. This study examines empirically the inter-play between exports, imports, FDI and...

A model is considered in which an entrepreneur uses debt to finance a risky investment project. He may in certain circumstances credibly threaten default on the loan, which is then renegotiated. However, lenders will never lend so much that default is credibly threatened in all states. There...