Economics Working Papers

The ADB Economics Working Paper Series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the Asian Development Bank (ADB) staff, consultants, or resource persons. The series deals with key economic and development problems, particularly those facing the Asia and Pacific region; as well as conceptual, analytical, or methodological issues relating to project/program economic analysis, and statistical data and measurement. The series aims to enhance the knowledge on Asia's development and policy challenges; strengthen analytical rigor and quality of ADB's country partnership strategies, and its subregional and country operations; and improve the quality and availability of statistical data and development indicators for monitoring development effectiveness.

  • 01 Mar 2012 | Publication

    Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 1)

    Jesus Felipe provides a working definition of the middle-income trap. In 2010 and out of 124 countries with available data, there were 52 middle-income countries, of which 35 were in this trap. Of the 35, 13 were in Latin America, 11 in the Middle East and North Africa, six in Sub-Saharan Africa, three in Asia, and two in Europe. The three Asian countries trapped were the Philippines, Sri Lanka, and Malaysia, although the last two may escape it soon. Indonesia and Pakistan are at the risk of falling into it in the coming years. The People's Republic China and India are not in the trap.
  • 01 Feb 2012 | Publication

    A Welfare Evaluation of East Asian Monetary Policy Regimes under Foreign Output Shock

    Joseph D. Alba, Wai-Mun Chia, and Donghyun Park assess the welfare impact of external shocks under different monetary policy regimes in East and Southeast Asia. To do so, they numerically solve and calculate the welfare loss function of a dynamic stochastic general equilibrium (DSGE) model with complete exchange rate pass through. Their DSGE model simulation results suggest that consumer price index inflation targeting delivers the least welfare losses for most small open economies in East and Southeast Asia.
  • 01 Feb 2012 | Publication

    Reexamining Policies for Food Security

    In the wake of recent food price spikes, plus growing demands for food in emerging Asia and for biofuels in Europe and the United States, governments are reexamining their strategies for dealing with both short-term and long-term food security concerns. This paper argues that long-run trends in real agricultural prices have policy implications for food security that are at least as important as those related to short-lived spikes around trend prices.
  • 01 Jan 2012 | Publication

    Going Regional: How to Deepen ASEAN's Financial Markets

    This study identifies the key issues involved in the further development and deepening of financial markets in the Association of Southeast Asian Nations (ASEAN). For the smaller ASEAN countries, the first priority is the development of the banking system. In the larger ASEAN+3 economies, banking systems are already reasonably well-developed, while stock markets and government bond markets have evidently achieved critical mass even while remaining purely domestic markets.
  • 01 Jan 2012 | Publication

    Does School Autonomy Make Sense Everywhere? Panel Estimates from PISA

    Eric A. Hanushek, Susanne Link, and Ludger Woessmann write that decentralization of decision making is among the most intriguing recent school reforms, in part because countries went in opposite directions over the past decade and because prior evidence is inconclusive.
  • 01 Jan 2012 | Publication

    New Economic Geography and Tax Competition in the PRC: A Firm-Level Data Analysis with Policy Implications

    Minsoo Lee analyzes the spatial determinants of new foreign and domestic enterprises in the export industry of the People's Republic of China (PRC) by applying new economic geography of agglomeration theory, tax competition theory by resource flow model, and comparative advantage analysis.
  • 01 Jan 2012 | Publication

    Lessons from the 1997 and the 2008 Crises in the Republic of Korea

    The economy of the Republic of Korea was hit harder than anticipated by the global financial crisis. In the first phase, large capital outflows led to a severe liquidity strain in the foreign exchange market resulting in a rapid depreciation of the exchange rate. Then, in the second phase, the contraction of global demand led to a collapse of exports and a sharp decline in economic activity, raising concerns about a full-fledged financial crisis in the country.
  • 01 Dec 2011 | Publication

    Subnational Purchasing Power Parities toward Integration of International Comparison Program and Consumer Price Index: The Case of the Philippines

    This paper analyzes the plausibility of integrating the International Comparison Program with the consumer price index (CPI) by computing subnational purchasing power parities using regional prices and expenditure weights from the CPI for the Philippines. The study shows that prices collected for the CPI could be used to provide reliable estimates of price levels across regions, and that regional price movements are highly correlated. The substitution effect of using year 2000 expenditure weight, however, has not been explored in this study.
  • 01 Dec 2011 | Publication

    Ownership Structure and Export Performance: Firm-Level Evidence from the Republic of Korea

    This paper empirically examines the relationship between the ownership structure of firms and their export performance. To do so, they use firm-level data from the Republic of Korea, a classical example of successful export-oriented industrialization. Their empirical results indicate that Korean firms with more concentrated ownership are more likely to be exporters and export more.
  • 01 Dec 2011 | Publication

    Demographic Dividends for India: Evidence and Implications Based on National Transfer Accounts

    There is a lack of verifiable evidence on the period and magnitude of the demographic dividends in India, a gap policy makers must address when setting priorities for human resource and capital investment to harvest the economic benefits of the demographic transition currently under way. This study attempts to fill this gap by quantifying the demographic dividends using National Transfer Accounts framework and by indicating their implications for equity.