Jauhari Dahalan

Income convergence dynamics in ASEAN and SAARC blocs

This paper examines whether convergence of real income exists among the Association of South East Asian Nations (ASEAN) and South Asian Association for Regional Cooperation (SAARC) countries for the period covering 1970–2009. Univariate Lagrange Multiplier (LM) unit root tests with structural break(s) are employed to check for the incidence of stochastic convergence, which is necessary for conditional convergence as proposed in the neoclassical model. We further examine the presence of β-convergence, which is considered as the sufficient requirement for conditional convergence. Test results suggest convergence among ASEAN members, with the absence of convergence in SAARC member countries.

Monetary policy transmission in an undeveloped South Pacific Island country: a case study of Samoa

Amongst the South Pacifics least developed small island countries, Samoa has emerged as a successful economy. Its achievements of low inflation and high growth rates have been due to sustained fiscal adjustment programmes and appropriate monetary policy measures. This paper undertakes an empirical study of transmission mechanism of monetary policy by adopting a VAR approach and using quarterly data over a 17-year period (1990-2006). The study findings are that money and exchange rate channels are important channels in transmitting monetary impulses to Samoas output.

The South African monetary policy and inflation targeting as a nominal anchor: Does the monetary policy become more effective?

This study investigates whether the South African inflation-targeting (IT) framework has performed the role of the nominal anchor and the process through which the monetary authority determines its instrument in the economy. The study employs generalised method of moments (GMM) estimators. The results of the post-IT adoption and full sample periods are characterised by forward-looking IT rule. Furthermore, the paper uses the augmented monetary policy rule to identify the factors that determine the monetary policy instrument for South Africa. The results confirm that the South African monetary economy practised full-fledged IT principle immediately after the adoption of the IT framework and the monetary policy rule serves as a nominal anchor for the economy. The policy implication is that for South Africa to continue keeping inflation to the required single-digit target, the Reserve Bank should further strengthen the IT framework adopted in the economy.