Was China the first domino? Assessing links between and other Asian economies

Article Abstract:

The theory that China's economic policies and performance contributed to the current Asian financial crisis of 1997-98 is disputed. In 1994, China devaluated its currency, and this purportedly strengthened China's competitive advantage compared to other Asian countries. It is argued that the devaluation was not important economically because of significant increases in the exchange rate. China's significant export performance in 1994-95 was also not a factor since other Asian countries also exhibited strong export performance. A discussion of the ways in which the Asian crisis can affect China is also presented.

China, Economic aspects, Asia, Currency devaluation, Devaluation (Currency)

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Is there a world real interest rate?

Article Abstract:

World ex post real interest rates from Sep. 1977 to Dec. 1993 are calculated using panel data techniques to analyze the interest rate movements of nine industrialized countries. Results show that interest rates between countries are highly correlated except for the US. Deviations of US real interest rates in from other countries is attributed to small role of trade in the US economy, making is less susceptible to changes in foreign prices.

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An optimizing analysis of the effects of world interest disturbances on the open economy term structure of interest rates

Article Abstract:

The relationship of domestic interest rates with changes in the interest rate structure in the international economy is discussed. Using a macroeconomic equilibrium model, it is shown that international developments affect domestic rates. A permanent increase in world rate leads to a temporary increase in domestic rates but a temporary increase in the former results in a more complex response from the latter.

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