Pradumna B. Rana

Exports, policy changes, and economic growth in developing countries after the 1973 oil shock: Comment

Abstract This paper questions Balassas (1985) finding that the contribution of exports to growth has increased in the post-1973 period as compared to the pre-1973 period. This is because his ‘pre-post’ analysis uses heterogeneous samples. Using a balanced sample from 45 developing countries we find that the contribution of export orientation, although significant, has fallen in the post-1973 period and that presently there is a need to reassess alternative development strategies. The major implication is that results obtained by estimating simple production functions are not very robust because of the sensitivity of the results to the choice of sample and estimation techniques, and strong conclusions should not be drawn from them.

Reform strategies in transitional economies: Lessons from Asia

Abstract To date, with the possible exception of Mongolia, liberalization efforts have generally been more successful in the transitional economies of Asia (TEAs) than in Eastern Europe and the former Soviet Union. This paper argues that both initial conditions and policies were important in explaining the difference in economic performance. The TEAs (except Mongolia) placed microeconomic reforms ahead of macroeconomic ones. Similarly, there were differences in the approaches taken in areas such as enterprise reform, price deregulation and financial sector reform. The TEAs need, however, to supplement their reform program with fiscal, monetary and external sector reforms on an urgent basis. Without such actions, the successes acheived so far could be at stake. Some general lessons for transitional economies are also derived.

Exchange rate risk under generalized floating: Eight Asian countries

Abstract This paper examines whether exchange rate risk (defined as the variability of nominal and real effective exchange rates) has increased in the present system of generalized floating for eight Asian developing countries. The first major finding is that the samples of effective exchange rates conform better to non-normal stable Paretian distributions than normal ones; sample standard deviation in therefore an erratic and misleading measure of variability. The second is that the scale and Ginis mean difference measures of variability indicate that exchange rate risk has increased substantially — in nominal terms more than in real terms and in the short run more than in the longer run.

Shifting comparative advantage among asian and pacific countries

This article examines the changes in the pattern of revealed comparative advantage of 14 Asian and Pacific countries from 1965 to 1984. It finds that in the NIEs and the ASEAN 4 countries the pattern changed significantly and that the changes were “beneficial” in the sense that the gains occurred in commodities for which world demand was growing relatively fast. In the cases of the South Asian and the South Pacific countries, however, the changes were not statistically significant and these countries exported goods for which world demand was relatively soft. The study also finds relatively strong evidence consistent with the “flying geese” pattern of development among the countries comprising the East Asian Industrial Belt (namely, Japan, the newly industrialized economies, and the ASEAN-4 countries) suggesting that economic prosperity has trickled down within this group of countries leading to greater interdependence and integration; the South Asian and the South Pacific countries appear to have been lef...

Fixed versus flexible exchange rates and measurement of exchange rate instability: Comment

This paper comments on Brodsky (1984) in which he refers to my November 1981 article. The paper reiterates the point that the standard deviation cannot be used to draw statistical inferences when the underlying distribution is non-normal stable Paretian. In such a case, both the scale and characteristic exponent have to be considered.

Trade Intensity And Business Cycle Synchronization: The Case Of East Asian Countries

This paper examines whether increasing trade intensities among East Asian countries have led to a synchronization of business cycles. It extends the work of Shin and Wang (2004) in two ways: by improving the specification of their business cycle correlation equation and by extending the sample to cover the post-crisis period. The study finds that intra-industry trade, rather than inter-industry trade, is the major factor in explaining business cycle co-movements in East Asia. This result has important implications for the prospects of introducing a single currency in the region.

Reform strategies in South Asian countries: a comparative analysis

Purpose – It is generally agreed that policy reforms have been more successful in China than in South Asia. The purpose of this paper is to argue that the relative success of China can be explained by the differences in initial conditions and in the design and sequencing of policies. The reform path followed by China placed reform of agriculture and rural light industry ahead of economic liberalization policies. South Asia, on the other hand, followed an opposite sequence with macroeconomic, trade, and industrial reforms coming ahead of agriculture and institutional reforms. This paper also finds that economic policies have mattered in South Asia and it develops an unfinished reform agenda comprising mainly the so‐called second generation reforms which is necessary to propel South Asia to a higher growth trajectory.Design/methodology/approach – The paper argues that the difference in economic performance between China and South Asia in the post‐reform period can be explained by the differences in initial ...

From a Centralized to a Decentralized Global Economic Architecture: An Overview

This paper argues that calls for a New Bretton Woods system in the aftermath of the global economic crisis—similar to the remarkable 1944 Bretton Woods conference that led to the establishment of various international economic institutions—are unlikely to be answered. The likely scenario is that the centralized architecture from before the global economic crisis will evolve toward a more decentralized and multilayered global architecture where regional institutions are linked together to a “senior†global organization in a complementary manner by rules and regulations. The paper also highlights the new regional institutions that Asia needs to establish to contribute to this evolving global economic architecture.

South Asia: Rising to the Challenge of Globalization

This timely book reviews how South Asia is rising to the challenge of globalization. In particular, how are South Asian countries maximizing the benefits of globalization whilst minimizing its costs? What lessons have these countries learned from the East Asian financial crisis? What actions have they taken at the national, regional, and global level? Some important topics covered in this book include policy reforms and economic integration in South Asia, comparisons between South Asia (mainly India) and China, and economic linkages between South Asia and East Asia including the possibility of an integrated Pan-Asia similar to the European Union. Academics, researchers, students, policymakers and observers of South Asian, and more broadly Asian, economic development and integration will want to read this book.

Rise of Complementarity between Global and Regional Financial Institutions: Perspectives from Asia

Global economic governance is in flux. The institutions and norms set up by the US and other Western powers decades ago are being eroded. Regional organisations and emerging powers are challenging them. This is especially the case in East Asia and China. Or are they? In this article we argue that East Asian countries in general and China in particular are not challenging existing global institutions and norms. Instead, they are setting up and developing institutions that complement – rather than compete against – existing institutions. Even though there is a degree of ‘healthy’ competition between regional institutions and their global counterparts, the former are essentially complementary to the latter. Global institutions can offer knowledge and capacity building to regional institutions, which in turn can provide access to a larger pool of resources. To prove our argument, we analyse the cases of liquidity provision – in the form of the IMF and the Chiang Mai Initiative Multilateralisation – and development financing – with the World Bank on the one hand and the Asian Infrastructure Investment Bank and the New Development Bank on the other. Our findings suggest that the multi†layering of international governance need not lead to competition between layers.