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 May 2011 | Publication

    Financial Integration in East Asia: An Empirical Investigation

    This paper empirically examine the degree of linkage among the equity and bond markets of Hong Kong, China; Japan; the Republic of Korea; and Singapore using a financial gravity model. This paper find that financial linkages among the four economies are higher than predicted by the financial gravity model, driven by trade linkages.
  • 01 May 2011 | Publication

    Underlying Trends and International Price Transmission of Agricultural Commodities

    This paper conducts an empirical analysis of commodity prices. The aim of this paper is twofold: to study the underlying trends for selected international agricultural commodity prices, and to test for international price transmission employing the cointegration method in the presence of asymmetric error correction. Using commodity specific monthly data, this paper examines the extent to which increases in international food prices during the past few years have been transmitted to domestic prices in selected Asian developing countries.
  • 01 Apr 2011 | Publication

    Energy Security, Food Security, and Economics of Sugarcane Bioethanol in India

    India's ambitions on enhancing energy security through bioethanol largely rely on second-generation technologies. Using a cost-benefit analysis, this paper show that sugarcane bioethanol is not economically viable and competes with agricultural resources. Molasses ethanol can support up to 5% blending while improving social welfare.
  • 01 Mar 2011 | Publication

    When are Capital Controls Effective? Evidence from Malaysia and Thailand

    This paper examines the impact of capital controls in Malaysia and Thailand during the period 2000-2010 using newly constructed capital control indexes. The results show that capital restrictions introduced in Thailand have no significant effect on inflows, but liberalization of outflows is effective in both Malaysia and Thailand. In addition, capital controls is found to have no impact on real exchange rates in both countries.
  • 01 Mar 2011 | Publication

    Transforming the Philippine Economy: 'Walking on Two Legs'

    Norio Usui analyzes the long-term growth of the Philippine economy through the lens of structural transformation to clarify the root causes of the country's lagged growth performance in the regional context. The main culprit behind lagging growth is a chronic productivity growth deficit as a result of stagnant industrialization. High unemployment, slow poverty reduction, and stagnant investment are a reflection of stagnant industrialization.
  • 01 Mar 2011 | Publication

    Impact of International Financial Shocks on Small Open Economies: The Case of Four ASEAN Countries

    This paper simulates the impact of a short-term shock originating from the global financial system on small open economies in the Association of Southeast Asian Nations (ASEAN). The simulation uses empirically estimated general equilibrium models for Indonesia, Malaysia, the Philippines, and Thailand.
  • 01 Feb 2011 | Publication

    Cross-Border Mergers and Acquisitions and Financial Development: Evidence from Emerging Asia

    This paper examines the relationship between cross-border mergers and acquisitions (M&A) and financial development in emerging Asian economies. Bilateral data of cross-border M&A for nine emerging Asian economies during 2000-2009 are analyzed with a sample selection model and panel data model.
  • 01 Feb 2011 | Publication

    A Welfare-Based Approach to Aggregating Growth Rates across Countries

    Aggregating per capita gross domestic product growth across countries has always been a technical problem due to complexities in the relative movements of exchange rates, economic output, and populations. As such, the conventional approach to aggregating growth across countries suffers from sensitivity to exchange rates, as well as from the possibility of aggregate growth rates not being convex combinations of individual growth rates.
  • 01 Feb 2011 | Publication

    Asia's Role in the New United States Export Economy

    This paper examines the composition and prospects for growth of net exports of the United States (US) to the world and to developing Asia. They find that much of the apparent shift in export product shares was a result of the worldwide collapse in demand for high-technology products, particularly new aircraft and information technology products. Nonetheless, India, ASEAN-10, and the newly industrialized economies are destinations for US high-technology products to an even greater extent than for the world as a whole.
  • 01 Feb 2011 | Publication

    The Rise of the Middle Class in the People's Republic of China

    Using $2-$20 (purchasing power parity) per capita daily income as the definition of middle class, majority of households in the People's Republic of China (PRC) have become middle class by 2007, which is especially impressive given that around 40% of households were still considered poor in 1991. The rise of the middle class is evident for both urban and rural areas and across East, Central, and West PRC. The drivers of this trend include market development, industrialization, and privatization.