Masahiro Kawai - Academia.edu (original) (raw)
Papers by Masahiro Kawai
The Changing Landscape of Global Financial Governance and the Role of Soft Law
행사명 : Strengthening Economic Cooperation in ASI
Journal of Southeast Asian Economies (JSEAE), 2016
Reform of the International Monetary System, 2014
This chapter provides an overview of the issues related to reform of the international monetary s... more This chapter provides an overview of the issues related to reform of the international monetary system in light of experiences during the global financial crisis of 2007–2009 and related developments, particularly the eurozone sovereign debt and banking crisis, with a focus on the implications for Asian economies. Contributions by various international experts are presented focusing on topics covering policy reforms on how to develop balanced policy frameworks that support currency stability, monetary policy independence, and an increasing degree of financial openness, and how to build robust, resilient financial systems that can serve the interests of the real sector in a stable manner and absorb shocks coming from volatile capital flows and global financial turmoil. The thematic topic areas covered include (i) international monetary system reforms, (ii) managing international capital flows, (iii) Asian currency arrangements, (iv) regional financial cooperation, and (v) linking regional and global initiatives.
The World of Economics, 1991
An optimum currency area refers to the ‘optimum’ geographical domain having as a general means of... more An optimum currency area refers to the ‘optimum’ geographical domain having as a general means of payments either a single common currency or several currencies whose exchange values are immutably pegged to one another with unlimited convertibility for both current and capital transactions, but whose exchange rates fluctuate in unison against the rest of the world. ‘Optimum’ is defined in terms of the macroeconomic goal of maintaining internal and external balance. Internal balance is achieved at the optimal trade-off point between inflation and unemployment (if such a trade-off really exists), and external balance involves both intra-area and inter-area balance of payments equilibrium.
Economics, Law, and Institutions in Asia Pacific, 2015
Although the initial impact of the global financial crisis on the region appeared limited, Asia w... more Although the initial impact of the global financial crisis on the region appeared limited, Asia was hit hard when the crisis spread to the real sector and caused the volume of world trade to collapse. Policymakers in almost all economies in the region responded to the sharp contraction of output by easing macroeconomic policies. However, the output gaps they faced were quite different, reflecting differences in business cycles. Subsequently, almost all economies in the region experienced a narrowing of the output gap. This chapter draws broad lessons from the recent macroeconomic policy experience of the region’s economies. It reviews and assesses the principal measures taken by Asian and other economies in response to the global financial crisis in the area of monetary policy, fiscal policy and exchange rate/reserve management policies, and provides policy recommendations on how to improve the effectiveness of macroeconomic policies.
ABSTRACT Widespread liberalization in the 1980s and 1990s enabled the freer movement of capital a... more ABSTRACT Widespread liberalization in the 1980s and 1990s enabled the freer movement of capital across international borders. Alongside large and often volatile movements in capital flows, risks to macro stability and the health of the financial system have led many countries to reconsider the wisdom of continuing to allow unimpeded flows of capital. Asia’s strong recovery in the aftermath of the Global Financial Crisis of 2007-2008 as well as continuing problems in the EU presage even larger flows of capital to Asia. This has led to a rethinking about the wisdom of unfettered cross-border capital flows and ways to manage capital flows, including the potential usefulness of capital controls.The ADB Forum on the Use of Capital Controls held on 14 July 2011 examined the context in which such controls could be useful as part of a broader menu of tools in the policymaker’s toolkit as well as the experiences of selected Asian countries in using de jure capital controls.
A Quest for a More Stable World Economic System, 1993
This chapter develops a formal, game—theoretic model to analyze the importance of monetary policy... more This chapter develops a formal, game—theoretic model to analyze the importance of monetary policy regimes and central bank commitments in international policy games in a world economy of two interdependent countries. In particular, it examines the welfare implications of the choice of monetary policy instruments, the ability of monetary authorities to commit themselves to policy targets, private—sector responses and initiatives in international policy games, and international monetary policy cooperation. Important elements of the model are the strategic interactions between the monetary authority and the private sector and the policy interactions between the two countries’ monetary authorities.
Oxford Handbooks Online, 2012
Journal of International Economics, 1984
Abstract This paper presents a multiperiod rational-expectations model of a foreign exchange mark... more Abstract This paper presents a multiperiod rational-expectations model of a foreign exchange market in order to analyze the effect of introducing currency forward trading on measures of exchange-rate volatility. Based on an optimizing approach to risk-average agents, it highlights how commercial traders and interest arbitrageurs behave facing exchange risk and forward contracting opportunities. It is found that forward trading tends to stabilize spot exchange rates if the trade disturbance is the predominant random factor in the market, while it exacerbates spot-rate variability if the disturbance in the interest rate differential is the chief stochastic element.
Economica, 1981
Most proponents and opponents of floating believe that greater variability of foreign exchange ra... more Most proponents and opponents of floating believe that greater variability of foreign exchange rates will increase uncertainty in international transactions and, hence, that the volume of international trade and financial flows will be curtailed without well-developed facilities for hedging against exchange uncertainty. The effects of exchange risk on merchant exporters and importers have been studied by some authors under the assumption of fixed production (Ethier, 1973; Clark, 1973; Hodder, 1977; etc.). Others have investigated the production behaviour of an export firm in a static context (see, for example, Baron, 1976a, b). However, the impact of the greater volatility of exchange rates upon domestic employment and capital accumulation on the one hand and upon international financial transactions on the other has received scant attention in the literature. This paper establishes a dynamic model of a small, competitive firm which is engaged in domestic production, foreign trade (through exports of its products and/or imports of its inputs), and financial transactions in domestic and foreign currencies. Since the firm faces uncertainty about future exchange rates and future prices of outputs and inputs, it attempts to hedge against the risk if it is risk-averse. A forward foreign exchange market is assumed to exist. The firm's decisions on production, investment, forward contracting and financing, which are closely related in the model, are based on exogenously given probability distributions of exchange rates and prices. The paper is planned as follows. Section I presents a model of the firm and formulates its objective function and constraints. Section II solves its maximization problem and interprets the first-order conditions for short-run equilibrium. In particular, three different roles of the firm in the forward exchange or financial market are emphasized: pure hedging, speculative hedging and pure speculation. Section III analyses the dynamic behaviour of a typical open-economy firm. Section IV conducts comparative dynamic exercises of the firm in a long-run steady state equilibrium, and discusses how exchange rate uncertainty affects the firm's optimal decisions. The implications of the purchasing power parity condition are also developed. Section V summarizes our conclusions.
Industrialized nations will be forced to confront new problems as their populations age and as in... more Industrialized nations will be forced to confront new problems as their populations age and as increasing globalization reduces their power to insulate their economies and policies from the effects of other countries' actions. These problems include prior spending commitments built into major entitlement programs. The United States can effectively plan for its future in an increasingly interdependent world, the authors assert, if it has the political will to begin now.
Eastern Economic Journal
The 1990s witnessed a surge in private capital flows to developing countries--and a surge in fina... more The 1990s witnessed a surge in private capital flows to developing countries--and a surge in financial crises. The most severe and regionally extensive has (to date) been East Asia's. The last six years has produced a wealth of research that now allows us to abstract policy lessons from the East Asian crisis and the difficulties in implementing them. These lessons span crisis prevention, management and resolution, and building a new international financial architecture with a regional focus. Progress in these areas would have helped prevent, or at least minimize, both the East Asian crisis and more recent crises.
SSRN Electronic Journal, 2000
A lively debate is taking place over the impact of free trade agreements (FTAs) on East Asia'... more A lively debate is taking place over the impact of free trade agreements (FTAs) on East Asia's business between those who view the agreements as a harmful Asian "noodle bowl"—i.e., overlapping regional trade agreements—of trade deals and others who see net beneficial effects in terms of regional liberalization and a building block to multilateral liberalization. A lack of enterprise-level data
The Changing Landscape of Global Financial Governance and the Role of Soft Law
행사명 : Strengthening Economic Cooperation in ASI
Journal of Southeast Asian Economies (JSEAE), 2016
Reform of the International Monetary System, 2014
This chapter provides an overview of the issues related to reform of the international monetary s... more This chapter provides an overview of the issues related to reform of the international monetary system in light of experiences during the global financial crisis of 2007–2009 and related developments, particularly the eurozone sovereign debt and banking crisis, with a focus on the implications for Asian economies. Contributions by various international experts are presented focusing on topics covering policy reforms on how to develop balanced policy frameworks that support currency stability, monetary policy independence, and an increasing degree of financial openness, and how to build robust, resilient financial systems that can serve the interests of the real sector in a stable manner and absorb shocks coming from volatile capital flows and global financial turmoil. The thematic topic areas covered include (i) international monetary system reforms, (ii) managing international capital flows, (iii) Asian currency arrangements, (iv) regional financial cooperation, and (v) linking regional and global initiatives.
The World of Economics, 1991
An optimum currency area refers to the ‘optimum’ geographical domain having as a general means of... more An optimum currency area refers to the ‘optimum’ geographical domain having as a general means of payments either a single common currency or several currencies whose exchange values are immutably pegged to one another with unlimited convertibility for both current and capital transactions, but whose exchange rates fluctuate in unison against the rest of the world. ‘Optimum’ is defined in terms of the macroeconomic goal of maintaining internal and external balance. Internal balance is achieved at the optimal trade-off point between inflation and unemployment (if such a trade-off really exists), and external balance involves both intra-area and inter-area balance of payments equilibrium.
Economics, Law, and Institutions in Asia Pacific, 2015
Although the initial impact of the global financial crisis on the region appeared limited, Asia w... more Although the initial impact of the global financial crisis on the region appeared limited, Asia was hit hard when the crisis spread to the real sector and caused the volume of world trade to collapse. Policymakers in almost all economies in the region responded to the sharp contraction of output by easing macroeconomic policies. However, the output gaps they faced were quite different, reflecting differences in business cycles. Subsequently, almost all economies in the region experienced a narrowing of the output gap. This chapter draws broad lessons from the recent macroeconomic policy experience of the region’s economies. It reviews and assesses the principal measures taken by Asian and other economies in response to the global financial crisis in the area of monetary policy, fiscal policy and exchange rate/reserve management policies, and provides policy recommendations on how to improve the effectiveness of macroeconomic policies.
ABSTRACT Widespread liberalization in the 1980s and 1990s enabled the freer movement of capital a... more ABSTRACT Widespread liberalization in the 1980s and 1990s enabled the freer movement of capital across international borders. Alongside large and often volatile movements in capital flows, risks to macro stability and the health of the financial system have led many countries to reconsider the wisdom of continuing to allow unimpeded flows of capital. Asia’s strong recovery in the aftermath of the Global Financial Crisis of 2007-2008 as well as continuing problems in the EU presage even larger flows of capital to Asia. This has led to a rethinking about the wisdom of unfettered cross-border capital flows and ways to manage capital flows, including the potential usefulness of capital controls.The ADB Forum on the Use of Capital Controls held on 14 July 2011 examined the context in which such controls could be useful as part of a broader menu of tools in the policymaker’s toolkit as well as the experiences of selected Asian countries in using de jure capital controls.
A Quest for a More Stable World Economic System, 1993
This chapter develops a formal, game—theoretic model to analyze the importance of monetary policy... more This chapter develops a formal, game—theoretic model to analyze the importance of monetary policy regimes and central bank commitments in international policy games in a world economy of two interdependent countries. In particular, it examines the welfare implications of the choice of monetary policy instruments, the ability of monetary authorities to commit themselves to policy targets, private—sector responses and initiatives in international policy games, and international monetary policy cooperation. Important elements of the model are the strategic interactions between the monetary authority and the private sector and the policy interactions between the two countries’ monetary authorities.
Oxford Handbooks Online, 2012
Journal of International Economics, 1984
Abstract This paper presents a multiperiod rational-expectations model of a foreign exchange mark... more Abstract This paper presents a multiperiod rational-expectations model of a foreign exchange market in order to analyze the effect of introducing currency forward trading on measures of exchange-rate volatility. Based on an optimizing approach to risk-average agents, it highlights how commercial traders and interest arbitrageurs behave facing exchange risk and forward contracting opportunities. It is found that forward trading tends to stabilize spot exchange rates if the trade disturbance is the predominant random factor in the market, while it exacerbates spot-rate variability if the disturbance in the interest rate differential is the chief stochastic element.
Economica, 1981
Most proponents and opponents of floating believe that greater variability of foreign exchange ra... more Most proponents and opponents of floating believe that greater variability of foreign exchange rates will increase uncertainty in international transactions and, hence, that the volume of international trade and financial flows will be curtailed without well-developed facilities for hedging against exchange uncertainty. The effects of exchange risk on merchant exporters and importers have been studied by some authors under the assumption of fixed production (Ethier, 1973; Clark, 1973; Hodder, 1977; etc.). Others have investigated the production behaviour of an export firm in a static context (see, for example, Baron, 1976a, b). However, the impact of the greater volatility of exchange rates upon domestic employment and capital accumulation on the one hand and upon international financial transactions on the other has received scant attention in the literature. This paper establishes a dynamic model of a small, competitive firm which is engaged in domestic production, foreign trade (through exports of its products and/or imports of its inputs), and financial transactions in domestic and foreign currencies. Since the firm faces uncertainty about future exchange rates and future prices of outputs and inputs, it attempts to hedge against the risk if it is risk-averse. A forward foreign exchange market is assumed to exist. The firm's decisions on production, investment, forward contracting and financing, which are closely related in the model, are based on exogenously given probability distributions of exchange rates and prices. The paper is planned as follows. Section I presents a model of the firm and formulates its objective function and constraints. Section II solves its maximization problem and interprets the first-order conditions for short-run equilibrium. In particular, three different roles of the firm in the forward exchange or financial market are emphasized: pure hedging, speculative hedging and pure speculation. Section III analyses the dynamic behaviour of a typical open-economy firm. Section IV conducts comparative dynamic exercises of the firm in a long-run steady state equilibrium, and discusses how exchange rate uncertainty affects the firm's optimal decisions. The implications of the purchasing power parity condition are also developed. Section V summarizes our conclusions.
Industrialized nations will be forced to confront new problems as their populations age and as in... more Industrialized nations will be forced to confront new problems as their populations age and as increasing globalization reduces their power to insulate their economies and policies from the effects of other countries' actions. These problems include prior spending commitments built into major entitlement programs. The United States can effectively plan for its future in an increasingly interdependent world, the authors assert, if it has the political will to begin now.
Eastern Economic Journal
The 1990s witnessed a surge in private capital flows to developing countries--and a surge in fina... more The 1990s witnessed a surge in private capital flows to developing countries--and a surge in financial crises. The most severe and regionally extensive has (to date) been East Asia's. The last six years has produced a wealth of research that now allows us to abstract policy lessons from the East Asian crisis and the difficulties in implementing them. These lessons span crisis prevention, management and resolution, and building a new international financial architecture with a regional focus. Progress in these areas would have helped prevent, or at least minimize, both the East Asian crisis and more recent crises.
SSRN Electronic Journal, 2000
A lively debate is taking place over the impact of free trade agreements (FTAs) on East Asia'... more A lively debate is taking place over the impact of free trade agreements (FTAs) on East Asia's business between those who view the agreements as a harmful Asian "noodle bowl"—i.e., overlapping regional trade agreements—of trade deals and others who see net beneficial effects in terms of regional liberalization and a building block to multilateral liberalization. A lack of enterprise-level data