can east asia weather a us slowdown?

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June 2007

ERDECONOMICS AND RESEARCH DEPARTMENT

Working PapeSERIESNo.

95

Cyn-Young Park

Can East Asia Weathera US Slowdown?

Can East Asia Weathera US Slowdown?


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ERD Wrin Paper N. 95

Can East asia WEathEra Us sloWdoWn?

Cyn-yoUng Park

JUnE 2007

Cyn-Young Park is Senior Economist in the Macroeconomics and Finance Research Division, Economics and ResearchDepartment, Asian Development Bank. The author is grateful for helpful comments from Frank Harrigan and wishes

to acknowledge valuable assistance from Lea Sumulong for the simulation. All remaining errors are the authors.


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Asian Development Bank6 ADB Avenue, Mandaluyong City1550 Metro Manila, Philippines

www.adb.org/economics

2007 by Asian Development BankJune 2007

ISSN 1655-5252

The views expressed in this paper

are those o the author(s) and do notnecessarily reect the views or policies

o the Asian Development Bank.


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FoREWoRD

The ERD Working Paper Series is a orum or ongoing and recently completedresearch and policy studies undertaken in the Asian Development Bank or on

its behal. The Series is a quick-disseminating, inormal publication meant tostimulate discussion and elicit eedback. Papers published under this Seriescould subsequently be revised or publication as articles in proessional journalsor chapters in books.


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CoNtENts

Abstract vii

I. Introduction 1

II. Asias External Dependency 2

III. Impact o a US Slowdown 3

A. Baseline Scenario 3 B. Three Alternative Scenarios o a US Downturn 3 C. Simulation Results 6

IV. Concluding Remarks 10

Appendix 11

Reerences 12


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AbstRACt

The expected slowdown in the economy o the United States (US) has ignitedincreasing concerns over the short-term growth prospect o East Asia. Historically,a US slowdown has oten been associated with a global slowdown. East Asia hasbeen particularly vulnerable to slowing US growth, given its relatively high export

reliance on the US market. During the last slump in 20012002, a drop in USimports immediately translated into alling exports, cuts in industrial production,and declining growth rates in East Asia. Using the Oxord Economics Global Model,

this paper examines the possible impacts on East Asia o a sharper and longerUS slowdown than is currently anticipated by the Asian Development Bank in its

Asian Development Outlook 2007. The results o the simulation exercises suggestthat the impact o a US slowdown on its own would not signifcantly impact

growth in East Asia. However, i a US slowdown instigates disorderly adjustmentsin international fnancial markets and spills over into the Peoples Republic oChina, the remainder o East Asia would not be spared.


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I. INtRoDuCtIoN

A slowdown in the United States (US) in 2007 has become more o a act than a conjecture.

The US economy registered the lowest growth rate in 4 years in the frst quarter at 1.3%, sparkingincreased concern over its 2007 growth prospects. A downturn in the US housing market, which hasalready dented US economic perormance through declines in residential investment and construction

activity, is expected to urther the slowdown beore it improves. Historically, a US slowdown hasoten been associated with a global slowdown. The US is by ar the largest single economy in theworld, accounting or nearly one third o global economic activity. A slowdown in the US economycould thus represent a signifcant downside risk to the global economy.

In the past, East Asia1

has proven particularly vulnerable to slowing growth in the US economygiven its relatively high export reliance on the US market. During the last slump in 20012002, USimports ell by a cumulative 4.2% and this all was translated into alling exports, cuts in industrial

production, and declining growth rates in East Asia. Although a sharp downturn in the US economyis not a part o the baseline scenario or the global economy presented in the Asian Development

Outlook (ADO) 2007 (ADB 2007), there is increasing concern about urther weakness in the US

economy and its potential impact on the East Asian economy.

Using the Oxord Economics Global Model (the Oxord model) (see Appendix or the modeldescription), this paper examines the possible impacts on East Asia o a sharper and longer US

slowdown than is currently anticipated in the ADO 2007. Additional scenarios where a sharper USslowdown triggers an unwinding o global imbalances or a hard landing in the Peoples Republic

o China (PRC) economy will also be considered. A deeper slowdown in the US economy couldspark ear over the sustainability o large US current account defcits, thus leading to a sharp

depreciation in the US dollar. Also, there are concerns about overheating in investments o the PRC.The PRC reported another strong growth in investment in the frst quarter o 2007, with fxed assetinvestment rising about 25% rom a year ago. Tightening measures intended to rein in boomingasset demands in the PRC continue. Combined with this, i a sharper slowdown in the US instigates

instability in global fnancial markets, a sudden shit in investors sentiment may lead to a sharpreduction in the PRC investment.

The results o these exercises suggest that the impact o a US slowdown on its own wouldnot signifcantly impact growth in East Asia. However, i a US slowdown instigates disorderlyadjustments in international fnancial markets and spills over into the PRC, the remainder o EastAsia would not be spared.

1 Throughout this paper, East Asia reers to nine economies in East and Southeast Asia Peoples Republic o China HongThroughout this paper, East Asia reers to nine economies in East and Southeast Asia Peoples Republic o China HongKong, China Indonesia Korea Malaysia Philippines Singapore Taipei,China and Thailand.


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II. AsIAs ExtERNAl DEPENDENCy

There is debate on whether East Asia is uncoupling rom the US economy. Traditionally, East Asiahas been viewed as a region that relies heavily on exports or growth. As an important corollary othis, the East Asian economy has been considered vulnerable to external demand shocks. However,

despite a visible slowing in US growth in the second hal o 2006, East Asias exports remainedrobust. Some commentators have interpreted this as evidence that East Asia might be uncouplingrom the US business cycle. This uncoupling thesis rests on the act that countries in East Asia

increasingly trade with each other and less with the US. Today, 40% o all goods leaving East Asiasports are headed or other East Asian destinations. The US market now accounts or only 18% oEast Asias total exports, down rom 24% just 5 years ago. Also, although the East Asian economyaccounts only about 10% o world gross domestic product (GDP) in real US dollar terms (22% on a

purchasing power parity basis), its share o incremental income in the global economy is growingrapidly. East Asia posted an average growth rate o 7.6% per year over the past 5 years, contributingnearly one ourth o global growth in the same period.

Yet despite its increasing share in world output, East Asias economic size remains small

relative to the USs 30.6% o world GDP, Japans 14.0%, and European Unions (henceorth, G3economies) 24.9%. East Asias weight in global demand is also less than its weight in income, asit has continued to run large current account surpluses. While the G3 economies consume nearly

as much as they produce, East Asia consumes only about 70% o what it produces. The great bulko East Asias products are being exported outside the region.

ADB (2007) presents evidence that East Asia is vulnerable to the global business cycle bothstructurally and cyclically. Sharing o production processes across East Asia has given strong momentumto regional economic and trade integration since the 1990s. But this regional integration is tiedto the globalization o business networks. Growing intraregional trade is to a large extent being

driven by back and orth shipments o intermediate goods that are eventually consumed outsidethe region. The worlds major industrial countries continue to contribute the bulk o fnal demand

rom which much o East Asias trade in intermediate goods is derived. More than 60% o EastAsian exports are ultimately headed or the G3 economies, ater tracking the ultimate destination

o trade o intermediate goods.

Analysis o East Asian business cycles also yields some surprises. Growth in East Asian countrieshas become much more closely synchronized, and, increasingly, the ups and downs o growth in

the PRC have moved in tandem with the rest o East Asia. But evidence o greater business cyclesynchronization is not confned to the region. Cyclical comovements o output in East Asia and theG3 have also visibly strengthened since the 1997 Asian crisis. Finally, there is evidence o stronger,

not weaker, sensitivity o cyclical movements o East Asian output to cyclicality o the G3 in thepostcrisis period. The International Monetary Fund (IMF 2007) broadly corroborates the evidencepresented in theADO 2007.

Taken together, this evidence questions the uncoupling thesis. Indeed, despite appearancesto the contrary, it would seem that in the postcrisis period, East Asia has become more, not lesssensitive, to the vicissitudes o movements in international demand, particularly in the G3. However,a question mark does exist over the economic (rather than statistical) signifcance o the underlying

linkages. To examine these, the next section uses the Oxord model, to quantiy and trace theimpacts o a variety o shocks on East Asia.

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seCtion iii

imPaCtofa us sloWdoWn

III. ImPACt oF A us sloWDoWN

A. baeine scenari

The baseline assumption is that US growth slows to an annual rate o 2.5% in 2007, downrom 3.3% in 2006. The ongoing housing slump has already hurt growth by crimping residentialinvestment and slowing business activity. Residential investment has allen or the fth consecutive

quarter in the last quarter o 2006. Although the pace o decline in home prices has moderated,alling housing starts and building permits continue to set a downward trend in the housing sector.However, buoyant consumption demand underpinned by steady improvement in the job marketprovides a backdrop or a quick rebound. The baseline scenario projects the US economy to quickly

recover, growing at 3.0% in 2008.

While it is clear that East Asia remains vulnerable to a severe slowing in the US economy, thebaseline scenario has modest implications only. There are three reasons or this. First, the depth

o the slowdown in the US economy is expected to be contained. So ar, the housing market-led

US slowdown has had limited spillovers elsewhere. Private consumption and business investmentunrelated to construction demand in the US remain buoyant. With the US import demand being

generally healthy, it also helps that East Asia has little industry exposure to the US housing sector.Second, both the Japanese and European economies are on a modest cyclical upturn. Together,they account or nearly 30% o total world GDP and represent more than one ourth o East Asiastotal export marketmuch larger than the share o the US market. Although historically these

economies were also seen generally sensitive to the US business cycle, their export reliance is arsmaller than the East Asian economy. As long as these economies retain growth momentum, theirdomestic demand could provide a meaningul buer or East Asian exports. Third, the baselinescenario embodies moderate accommodations in monetary and fscal policies. For example, the

baseline scenario already incorporates a nearly 100 basis point reduction in the US Federal Fundsrate by the end o 2008. Timely and responsive policy actions may help mitigate adverse impacts

o the slowing economy.

Against this backdrop, the outlook or East Asia remains brisk. As the pace o global expansioneases, growth is projected to ease to 7.5% in 2007, down rom 8.1% in 2006 (ADB 2007). Butgrowth o 7.5% would still be aster than the average annual growth o 6.5% over the last decade.

While net exports contribution to growth is expected to soten, strengthening domestic demandis expected to fll part o the gap. Little change is expected in 2008. This baseline outlook isconsistent with the consensus assessment that a housing market-led slowdown in the US would bea relatively isolated domestic phenomenon with little complications or the rest o the world (see

IMF 2007).

b. three Aernaive scenari f a us Dwnrn

The analysis in this section ocuses on three alternative scenarios, each o which anticipatesa sharper all in US GDP growth compared with the baseline scenario. The frst scenario (Scenario

1) considers a urther decline in US consumption, which will amount to a 1 percentage point dropin GDP growth rom the baseline scenario in 2007 and 2008. Scenario 1A and Scenario 1B providea more explicit description o relevant downside risks associated with the sharper US slowdown. In

Scenario 1A, the slower US growth triggers a dollar depreciation o 10% against all the currencies,

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except Hong Kong, China where the currency is fxed. Finally, Scenario 1B considers the possibility

that slower US growth acts as a drag on global investment, leading to a reduction in gross fxedinvestment by 10% over the baseline level in the PRC.

Figures 1ac demonstrate the changes implied by these scenarios compared to the baseline.

The frst panel o Figure 1 shows that US growth rates all by 1 percentage point rom the baselinegrowth rates or two consecutive years. This implies that US growth slows to 1.5% in 2007 and2.0% in 2008, compared with 2.5% and 3.0% respectively presented in the baseline scenario.

The second panel shows that the US dollar depreciates by 10 percent. This one-step depreciationagainst all currencies leaves the eective exchange rate or the US dollar permanently lower thanthe baseline level by 10 percent. Likewise, the third panel illustrates a permanent reduction in thePRC investment by 10% compared to the baseline level. Scenario 1B is again a one-step adjustment

in the level. In terms o growth rates, it is only a temporary shock and investment growth ratesreturn to the baseline scenario values immediately ater one year. For example, investment growthdrops rom the baseline growth rate in 2007 by nearly 12 percentage points, but rom 2008 onward,

growth resumes at the baseline pace. Figure 1a corresponds to Scenario 1. A combination o Figure1a and 1b represents Scenario 1A, whereas Figure 1a and 1c together express Scenario 1B.

Scenario 1 envisions a sharper US slowdown than currently anticipated in the baseline scenario.

While a sharper than anticipated slowdown may warrant more aggressive monetary and fscal easing,there may not be enough room or these policies to deal with the slowdown globally this timearound, as opposed to the last global downturn in 2001. First, persistently high oil prices continueto eed into underlying inationary pressures, which may prevent aected countries rom exercising

expansionary monetary policy corresponding to a urther slowdown. Second, fscal expansion as wellmay not be easily accommodated, as many countries remain stretched in their fscal balances andare now committed to long-term consolidation plans. The simulation exercise is thereore basedon the assumption that there is no urther change in domestic and international policies, global

interest rates, and exchange rates beyond which are already embedded in the baseline scenario.

Scenario 1A considers an additional risk that a sharper US slowdown triggers dollar depreciationby motivating international investors to restructure their portolios away rom dollar assets. The UScurrent account defcit reached $856.7 billion in 2006, accounting or about 7% o GDP. As a resulto steady rises in defcits, the US has now accumulated net oreign debt o about $3 trillion atthe end o 2006. This implies that the US economy must attract large capital inows rom the rest

o the world to fnance its defcit. A disorderly resolution o large US current account imbalancescould lead to a sharp depreciation in the US dollar.

Scenario 1B imagines another case where a sharper US slowdown undermines investor confdence

and adversely aects emerging Asian fnancial markets and investment. As seen in late February,trouble in the US stockmarket oten triggers a broad sell-o in emerging Asian markets. Furthermore,previous studies fnd that there exists an important relationship between intraregional trade and

oreign direct investment (FDI) ows (see ADB 2006 or a survey o these studies), suggestingthat FDI ows to the region could be responsive to the prospect o the regions export growth. Asa primary recipient o private equity investment including FDI ows, the PRC might experience asharp all in investment, potentially precipitating a hard landing in the PRC.

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FIGURE 1A

US GDP(IN US$ BILLIONS)

FIGURE 1CPRC GROSS FIXED INVESTMENT

(IN US$ MILLIONS)

2006 2007 2008 2009 2010 2011

Baseline

Scenarios 1, 1a, and 1b

14,000

13,500

13,000

12,500

12,000

11,500

11,002006 2007 2008 2009 2010 2011

FIGURE 1BUS DOLLAR

(IN EFFECTIVE EXCHANGE RATES)

2006 2007 2008 2009 2010 2011

100.0

90.0

80.0

70.0

60.0

50.0

Baseline

Scenario 1a

Baseline

Scenario 1b

18,000.0

16,000.0

14,000.0

12,000.0

10,000.0

8,000.0

6,000.0

FIGURE 1SCENARIOS

seCtion iii


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C. siain Re

Table 1 summarizes the estimated eects o a 1 percentage point drop in US GDP growth onoverall GDP along with its demand components, consumer prices, industrial production, employment,and current account balance or East Asia and East Asia excluding the PRC. The eects are shown

as percentage point deviations rom the baseline. For example, East Asian growth drops by a 0.5percentage point, which can be translated into an annual growth rate o 7.0% in 2007 insteado 7.5% in the baseline projection. This amounts to an income loss o $80.3 billionabout 0.4%

o total GDP in East Asiacompared to the estimated GDP level or the frst year in the baselinescenario.

The main transmission mechanism here is trade linkages (see Appendix or the detailed model

mechanism). Slower US growth implies slower growth in exports and income or US trading partners.Reduced export earnings and income relative to the baseline level will then depress domesticconsumption. This adverse income eect or the US trading partners can be urther aggravated bythe price eect. As domestic demand ends lower than the baseline level, excess supply will add

downward pressure on domestic price levels rom the baseline level. As a result, the ination rate

will all under the baseline ination rate, thus liting real interest rates instantly higher relative tothe baseline scenario. Higher real interest rates then curb domestic consumption and investmentgrowth even more. In the absence o monetary and fscal policy responses in East Asia, domestic

demand growth will be urther trimmed.

ADB (2005) fnds that signifcant improvements in investment and capital accumulation are

also oten associated with strong export growth in East Asia. It urther suggests that exports act asan important growth stimulator or the East Asian economy. Slower export growth oten discouragesdomestic production, corporate spending, and hiring, thus leading to slower domestic demand andincome growth. Slower investment growth also has long-term consequences, as a reduction in the

capital stock relative to the baseline will lower potential output (again relative to the baseline).Where investment growth slows signifcantly vis--vis the baseline scenario and recovers only

gradually due to country-specifc rigidities, capital stocks could end much lower than the baselinelevel, thus having a lasting eect on productivity and potential growth.

In general, individual countries may take a dierent route in the return to long-term equilibrium,depending on the existing policy rameworks and structural rigidities. In some cases, a lack ocentral bank credibility may put an economy through high ination during the adjustment process.

In others, structural rigidities in the labor market may prolong the adjustment process until realwages drop to balance the market. Reecting the country-specifc assumptions regarding price,wage, and structural rigidities in the Oxord model, the impact on GDP growth will dier rom one

country to another.

In Scenario 1, a deceleration in US growth has non-negligible eects on a number o EastAsian economies. East Asias growth slows by 0.5 percentage point in 2007 and by a urther 0.8

percentage point in 2008 in response to a 1 percentage point all in US growth. The implied losso income is signifcant, amounting to $282.2 billion or 1.5% o East Asias total GDP over 2 years.But underlying growth would remain comparatively robust and above 6% given the strong baselineprojection.

The impact on East Asias economic perormance o slower US growth is signifcant, bothdirectly through slowing US import growth and indirectly through the inuence o the US slowdown

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seCtion iii


tablE 1simUlation rEsUlts

(inPErCEntagEPointdEviationsfrombasElinEgroWthratEs)

sCEnario 1: Us groWth dEClinEsby 1 PPtfor tWo ConsECUtivE yEarsasia asia ExClUding PrC g3

yEar 1 yEar 2 yEar 1 yEar 2 yEar 1 yEar 2

GDP (%, yoy) -0.45 -0.76 -0.42 -0.59 -0.56 -0.65

Consumption (%, yoy) -0.14 -0.34 -0.23 -0.57 -0.63 -0.66

Investment (%, yoy) -0.31 -1.11 -0.34 -0.58 -0.74 -1.18

Exports (%, yoy) -1.42 -0.98 -0.97 -0.98 -0.62 -0.63

Imports (%, yoy) -1.08 -1.11 -0.81 -0.93 -1.06 -0.95

Consumer prices (%, yoy) -0.03 -0.15 -0.01 -0.06 -0.03 -0.32

Industrial production (%, yoy) -0.51 -0.78 -0.57 -0.66 -0.54 -0.90

Unemployment rate (%) 0.05 0.10 0.02 0.05 0.18 0.31

Current account (% o GDP) -0.18 -0.16 -0.11 -0.13 0.07 0.12Trade balance ($ million) -10771.02 -12193.44 -2852.62 -4120.74 25401.97 49309.44

sCEnario 1a: 10% Us$ dEPrECiationin additionto sCEnario 1

asia asia ExClUding PrC g3


GDP (%, yoy) -1.85 -1.73 -2.19 -1.11 -0.86 -1.05

Consumption (%, yoy) -0.36 -1.16 -0.67 -2.28 -1.28 -1.10

Investment (%, yoy) -1.17 -2.70 -1.35 -1.70 -0.88 -1.70

Exports (%, yoy) -4.08 -2.99 -3.52 -2.21 -0.40 -1.73

Imports (%, yoy) -2.09 -3.75 -1.61 -3.65 -2.51 -1.90


Industrial production (%, yoy) -2.11 -1.52 -3.36 -0.11 0.04 -1.35Unemployment rate (%) 0.13 0.28 0.07 0.14 0.24 0.46

Current account (% o GDP) -0.61 -0.35 -0.20 0.19 0.47 0.42

Trade balance ($ million) -3597.68 1759.43 3005.32 12720.23 154426.41 140742.72

sCEnario 1b: 10% rEdUCtioninthE PrC gross fixEd invEstmEntin additionto sCEnario 1

asia asia ExClUding PrC g3


GDP (%, yoy) -3.42 -0.29 -0.81 -0.93 -0.61 -0.73

Consumption (%, yoy) -0.69 -0.83 -0.43 -1.04 -0.63 -0.72

Investment (%, yoy) -6.50 -0.51 -0.60 -1.00 -0.78 -1.29

Exports (%, yoy) -1.99 -0.90 -1.92 -1.45 -0.97 -0.93

Imports (%, yoy) -3.57 -2.00 -1.59 -1.56 -1.19 -1.12


Industrial production (%, yoy) -2.60 -1.59 -1.11 -1.00 -0.64 -1.05

Unemployment rate (%) 0.31 0.16 0.04 0.09 0.19 0.35

Current account (% o GDP) 0.50 0.80 -0.22 -0.17 0.04 0.08

Trade balance ($ million) 14677.82 36285.79 -6387.18 -6277.31 19480.49 39479.63

Note PPT means percentage point yoy means year-on-year, GDP means gross domestic product.Source Sta estimates using the Oxord model.

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on other important markets or East Asias exports. The estimated results also maniest empirical

regularities that slowing exports lead to slower growth o industrial production and businessinvestment. The level o investment and capital stocks will all lower than the estimated levels inthe baseline scenario over time, with the all in investment tending to be most signifcant in PRC

Korea Malaysia Singapore Taipei,China and Thailand given their export dependence.2

Reecting its relatively high exposure to external markets, a decline in East Asian exportgrowth is more signifcant than that o other regions. East Asias export growth declines by a

cumulative 2.4 percentage points over 2 years, compared to a drop o 1.1 percentage points in theeuro-zone economy. A reduction in US imports relative to the baseline was also transmitted directlyas a decline in East Asias trade surplus. The loss o the trade surpluses o these nine East Asianeconomies amounted to about $10.8 billion in 2007 and another $12.2 billion in 2008about one

third o the gains in US trade balance owing to a reduction in its imports. But in light o relativelyhealthy growth in Japan and the European countries, the reduction o East Asias current accountbalance is still moderate and limited to only about 0.2% o GDP each year.

Strong growth momentum in East Asias domestic demand, however, limits the severity o the

overall impact. Consumption growth ell by 0.5 percentage point rom the baseline over 2 yearsmainly due to a reduction in real income. Investment is hit more signifcantly, as its growth declined

by 1.4 percentage points over 2 years rom the baseline assumption. But, excluding the PRC whereinvestment growth ell by 1.8 percentage point, the rest o the region suers only a 0.9 percentagepoint drop in investment growth.

The relatively modest impact o a US slowdown is generally consistent with the earlierempirical results (see IMF 2007 or a survey). This is largely because most global economic modelsincluding the Oxord model ocus on trade linkages as the main mechanism through which shocksare transmitted rom one economy to another, and net exports are generally only a small component

o GDP no matter how open an economy is.

But, conventional global economic models may miss or underestimate the working through other

mechanisms. Recent studies (see ADB 2007, Kose et al. 2003, IMF 2007) have shown that globaltrade and fnancial linkages are strengthening over time, thus providing channels o increasinglyrapid transmission or a global shock. In particular, increased global fnancial linkages appear tounderpin the cross-country correlations o asset prices and related market sentiments. Past global

recessions oten witnessed signifcantly larger spillovers through reactions in global fnancialmarkets besides usual trade channels. Moreover, the impact o shocks can be amplifed i they areconcentrated in particular sectors. For example, a global slowdown in global durable investment,such as in 20012002, would likely hit the inormation technology industry, an activity in which

countries in East Asia specialize. External disturbances may also impinge on domestic demand moredirectly by aecting consumer and investor confdence. In an increasingly integrated world, producersand investors share global product and fnancial markets, making them potentially susceptible to

sentiments in other markets. Although the Oxord model incorporates global trade linkages withempirically calibrated short-term impulses through trade-related channels, it does not capture thebehavioral eect through business and investor confdence.

2 The estimated results or individual countries are not reported in this study due to space limitations, but are available

upon request.

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Scenario 1A and 1B explores the potential risks o a US slowdown aecting other economies

more explicitly.3 First, in Scenario IA a weaker dollar implies a loss o competitiveness or US tradingpartners, which produces a more synchronized global downturn. Overall, the reduction in overall GDPgrowth amounts to 1.8 percentage points in 2007, compared to 0.5 in Scenario 1. Growth slows in

2008 by another 1.7 percentage points. In combination with the weaker global demand, strongercurrencies in East Asia appear to exacerbate the price eect by restraining ination urther and thuspushing real interest rates even higher compared to Scenario 1. As a result, domestic consumptionand investment growth alls by 1.5 and 3.9 percentage points, respectively, in the next 2 years

relative to the baseline scenario. Although the trade surplus widens marginally in 2008 compared tothe baseline, this mainly reects a contraction in import growth due to weaker growth o domesticdemand. Both industrial production and investment growth slow sharply, which bear potentiallylonger-term consequences on productivity and growth.

Second, investment is assumed to all by 10% in the PRC over the baseline in Scenario 1B.However, with investment projected to grow more than 10% a year over the next 2 years in the

baseline scenario, a 10% reduction in the 2007 level means that it is still higher than the 2006level. Nevertheless, slower growth o PRC investment has signifcant ripple eects on the rest oEast Asia. The PRC bears the direct impact o the slowdown with growth shaved by 5.6 percentagepoints in 2007. But, the rest o East Asia also sees its growth clipped by about 0.8 percentage

point in 2007, ollowed by another 0.9 percentage point o in 2008. As rapid investment growthin the PRC has been an engine o growth or the regions trade, the external sector o the rest oEast Asia suers most signifcantly. Regional economies that export a bulk o capital goods to thePRC such as Hong Kong,China Korea and Taipei,China, appear to incur proportionally large losses

in trade surpluses, thus contributing most to the total loss o $12.7 billion (about $6 billion eachyear) over 2 years borne by the rest o East Asia relative to the baseline. It is also noteworthythat Japan, which is a major supplier o capital goods or East Asia (but not included in East Asia

in this paper) suers a substantially large loss o $7.4 billion in 2007, and an even bigger loss o$10.2 billion in 2008.

In both Scenarios 1A and 1B, a loss o real income vis--vis the current baseline is substantially

larger than Scenario 1 o a 1 percentage point drop in US growth alone. In all cases, however,overall economic impacts exhibit diverse patterns across aected trading partners depending on thespecifcs o an individual economy, including its exposure to the US or the PRC markets dierencesin price and income elasticities o export and import and relative sizes o income eects at home

and abroad. For instance in Scenario 1A, a broader global slowdown accompanied by a weaker dollarappear to have more signifcant eect on PRC Hong Kong,China Korea Singapore Taipei,China andThailand, given their high export dependency. In Scenario 1B, economies that are exposed to the

PRC market appear to suer a signifcant reduction in trade surpluses as mentioned above. Overall,the speed o economic adjustment will also depend on various country-specifc actors, includingdierences in initial conditions and economic structures.

3 The relative sizes o the impacts are not directly comparable between the two scenarios, given the dierent nature othese shocks. But in both cases, the magnitude o these shocks alls between one standard deviation and two standard

deviations o their respective variables, indicating the probability o each o these risks materializing may be similar.

For example in Scenario 1A, one standard deviation o the dollar index against weighted global currencies over thelast decade was about 7%. Thus, a 10% change in the dollar exchange rate is a shock o the magnitude greater than

one standard deviation but smaller than two standard deviations.

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IV. CoNCluDINg REmARks

East Asian growth is set to slow to a more moderate pace against the backdrop o a USslowdown. But the East Asian economy is expected to continue a still healthy expansion by historicstandards, i the US slowdown remains orderly with limited spillovers into the rest o the world.

The Oxord model estimates suggest that growth in East Asia would be clipped by about 0.5 and0.8 percentage point o rom the currently projected growth rates in 2007 and 2008, respectively,in response to a 1 percentage point cut in US growth.

However, the simulation results also warn against complacency. The inuence o the USeconomy on the rest o the world remains signifcant and there are risks o potential spillovers roma sharper US slowdown to the rest o the world. Downside risks are real and particularly relevant

against the backdrop o persistently large current account imbalances in the PRC and the US. Otenin the past, slower growth proved to be a harbinger o something worse, prompting a recessionand related fnancial instability. Given its undisputed signaling role in the global fnancial system,any shockwave emanating rom the US market could be particularly threatening to the regions

fnancial stability and growth. At the same time, there are indications that the East Asian economy

has become more sensitive to cyclical uctuations o the global economy (see ADB 2007). Greatertrade and fnancial linkages both within the region and with the rest o the world suggest thatpotential spillovers rom a sharper US slowdown and its resonance through the rest o the world

could be more signifcant now than in the past. The simulation results generally confrm that in caseo any spillovers, the impact on the East Asian economy o the same magnitude o a US slowdowncould be much more serious.

Ability to sustain domestic demand growth by promoting economic efciency and exibilityremains a key to keeping growth momentum against alling external demand. The simulation resultssuggest that economies that are more agile and exible in both product and actor markets quickly

recover and minimize the longer-term consequences. Flexibility in the exchange rate regime isanother important actor to consider in insulating the economies rom external shocks. Eorts to

improve economic agility and structural exibility can only be made against sound macroeconomicmanagement at all times. Initial conditions and economic structures exert signifcant inuence

on the initial impact o a shock and the ollowing adjustment process. For example, the currentcyclical position o an economy relative to its potential growth rate may either oset or ampliythe initial impulses o a shock. In this sense, a stable macroeconomic environment o low ination

and prudent fscal management also allows room or more accommodative policies to minimize thepain o necessary economic adjustments to an external shock.

10 June2007


Cyn-young Park


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aPPendix

APPENDIx

The Oxord Economics Global Model (the Oxord model) is a multi-country multi-region macroeconometric

model o the world economy that is designed to capture channels o international transmission o a shockthrough trade and investment ows as well as relationships with other key economic variables, such as GDP,

employment, ination, interest rates, and exchange rates. The Oxord model is, thereore, well suited orthe analysis o economic consequences o scenarios including changes in monetary and fscal policies in the

international context.

The Oxord model is structured in a way that, while it exhibits Keynesian dynamics that stems rom

price rigidities in the short to medium term, its long-run properties are neo-classical, which means thatthe long-run equilibrium is ultimately bound by supply actors.

A simulation o a all in GDP o 1 percentage point sustained over 2 years in the scenarios presentedhere is based on the assumption that a all in private consumption (a main component o fnal demand)

is the direct cause o the GDP decrease. It should be emphasized that the results o a growth simulationdepend critically on the assumption regarding how the change in GDP has been made. A reduction in GDParising rom the demand side would yield very dierent results compared with those when the reduction is

the product o a supply side shock, which is in principal more permanent in nature.

Also like most other macroeconometric models, embedded in the Oxord model are such channels ointernational transmission o a shock as trade and investment ows. When there is a shock, key nominal variablesincluding ination, interest rates, wages, and exchange rates will change to restore balance between demand

and supply both at the national and global levels. Just as external shocks aect domestic economic activityand prices, the related adjustments in an individual economy will transmit to other countries through trade

and investment linkages until balance is restored both domestically and internationally. In this adjustmentprocess, however, dierences in the degree o nominal rigidities and the credibility o monetary authorities,

as presented in the parameters o these price reaction unctions, determine how long it will take to stabilizeination and return to a long-run equilibrium growth rate.

The Oxord model comprises 44 country models including 20 emerging market countries together withsix trading blocs. The country models are ully integrated through trade, prices, interest rates, and exchange

rates. Individual country models are identical in basic theoretical structure, but cross-country dierencesare reected in dierent estimated parameter values, which are meant to characterize idiosyncrasies o anindividual country.

The structure o individual country models is based on the income expenditure accounting ramework.Consumption is a unction o real income, real fnancial wealth, real interest rates, and ination. Investment

behavior is based on Tobins q theory, according to which the investment rate is determined by its opportunitycost, ater taking signifcant adjustment costs into account. However, on the supply side, each o these

economies behaves like a one-sector economy under Cobb-Douglas technology (with a constant rate o totalactor productivity growth) using two actor inputs (labor and capital). Firms are assumed to set prices given

output and the capital stock, but the labor market is imperectly competitive. Output cycles move arounda deterministic trend, where the level o potential output corresponds to a natural rate o unemployment.Ination is a monetary phenomenon in the long run. The Oxord model embodies a vertical Phillips curve

in the long run, while ination is controlled by endogenized monetary policy. Central banks are assumed to

generate credible and eective ination targets that determine the nominal trends and also the embeddedequations. The model converges to a long-run equilibrium that is determined by a natural growth rate basedon productivity and population growth.

The Oxord model solves each block o simultaneous equations using an iterative procedure to ensureconsistency across blocks until the ull system has converged. For trade links, the model operates a trade

matrix based on weighted trade partner imports to drive demand or a countrys exports instead o bilateral



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trade relationships. There are also interest rates, exchange rates, risk premia, and asset price linkages identifed

in the model. Commodity prices, including crude oil prices, are determined by aggregate global supply anddemand.

Finally, due caution is necessary when interpreting the simulation results. Most macroeconomic models,

including the Oxord model here, oten all short o explaining the ull account o potential economic impacts,given the complexity o transmission mechanisms. At play could be many other actors, which are not ullyincorporated in a macroeconomic model.

REFERENCEs

Asian Development Bank. 2005. Export or Domestic Demand-led Growth in Developing Asia? InAsian Development

Outlook 2005. Hong Kong, China Oxord University Press or the Asian Development Bank.

. 2006. Routes or Asias Trade. In Asian Development Outlook 2006. Hong Kong, China Oxord

University Press or the Asian Development Bank.

. 2007. Uncoupling Asia Myth and Reality. InAsian Development Outlook 2007. Hong Kong, China

Oxord University Press or the Asian Development Bank.International Monetary Fund. 2007. Decoupling the Train? Spillovers and Cycles in the Global Economy. In

World Economic Outlook 2007. Washington, DC.

Kose, M., E. Prasad, and M. Terrones. 2003. How Does Globalization Aect the Synchronization o Business

Cycles? The American Economic Review93(2)5762.

1 June2007


Cyn-young Park


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13

PUBLICATIONS FROM THE

ECONOMICS AND RESEARCH DEPARTMENT

ERD WORKING PAPER SERIES (WPS)

(Published in-house; Available through ADB Office of External Relations; Free of Charge)

No. 1 Capitalizing on Globalization

Barry Eichengreen, January 2002No. 2 Policy-based Lending and Poverty Reduction:

An Overview of Processes, Assessmentand Options

Richard Bolt and Manabu Fujimura, January2002

No. 3 The Automotive Supply Chain: Global Trends

and Asian PerspectivesFrancisco Veloso and Rajiv Kumar, January 2002

No. 4 International Competitiveness of Asian Firms:

An Analytical Framework

Rajiv Kumar and Doren Chadee, February 2002No. 5 The International Competitiveness of Asian

Economies in the Apparel Commodity Chain

Gary Gereffi, February 2002No. 6 Monetary and Financial Cooperation in East

AsiaThe Chiang Mai Initiative and Beyond

Pradumna B. Rana, February 2002No. 7 Probing Beneath Cross-national Averages: Poverty,

Inequality, and Growth in the Philippines

Arsenio M. Balisacan and Ernesto M. Pernia,March 2002

No. 8 Poverty, Growth, and Inequality in Thailand

Anil B. Deolalikar, April 2002No. 9 Microfinance in Northeast Thailand: Who Benefits

and How Much?

Brett E. Coleman, April 2002No. 10 Poverty Reduction and the Role of Institutions in

Developing Asia

Anil B. Deolalikar, Alex B. Brilliantes, Jr.,Raghav Gaiha, Ernesto M. Pernia, Mary Raceliswith the assistance of Marita Concepcion Castro-Guevara, Liza L. Lim, Pilipinas F. Quising, May2002

No. 11 The European Social Model: Lessons for

Developing Countries

Assar Lindbeck, May 2002No. 12 Costs and Benefits of a Common Currency for

ASEAN

Srinivasa Madhur, May 2002No. 13 Monetary Cooperation in East Asia: A Survey

Raul Fabella, May 2002No. 14 Toward A Political Economy Approach

to Policy-based Lending

George Abonyi, May 2002No. 15 A Framework for Establishing Priorities in a

Country Poverty Reduction Strategy

Ron Duncan and Steve Pollard, June 2002No. 16 The Role of Infrastructure in Land-use Dynamics

and Rice Production in Viet Nams Mekong River

Delta

Christopher Edmonds, July 2002No. 17 Effect of Decentralization Strategy on

Macroeconomic Stability in Thailand

Kanokpan Lao-Araya, August 2002No. 18 Poverty and Patterns of Growth

Rana Hasan and M. G. Quibria, August 2002No. 19 Why are Some Countries Richer than Others?

A Reassessment of Mankiw-Romer-Weils Test of

the Neoclassical Growth Model

Jesus Felipe and John McCombie, August 2002No. 20 Modernization and Son Preference in Peoples

Republic of China

Robin Burgess and Juzhong Zhuang, September2002

No. 21 The Doha Agenda and Development: A View fromthe Uruguay Round

J. Michael Finger, September 2002No. 22 Conceptual Issues in the Role of Education

Decentralization in Promoting Effective Schooling in

Asian Developing CountriesJere R. Behrman, Anil B. Deolalikar, and Lee-Ying Son, September 2002

No. 23 Promoting Effective Schooling through EducationDecentralization in Bangladesh, Indonesia, andPhilippines

Jere R. Behrman, Anil B. Deolalikar, and Lee-Ying Son, September 2002

No. 24 Financial Opening under the WTO Agreement in

Selected Asian Countries: Progress and Issues

Yun-Hwan Kim, September 2002No. 25 Revisiting Growth and Poverty Reduction in

Indonesia: What Do Subnational Data Show?

Arsenio M. Balisacan, Ernesto M. Pernia,and Abuzar Asra, October 2002

No. 26 Causes of the 1997 Asian Financial Crisis: What

Can an Early Warning System Model Tell Us?

Juzhong Zhuang and J. Malcolm Dowling,October 2002

No. 27 Digital Divide: Determinants and Policies withSpecial Reference to Asia

M. G. Quibria, Shamsun N. Ahmed, TedTschang, and Mari-Len Reyes-Macasaquit, October2002

No. 28 Regional Cooperation in Asia: Long-term Progress,

Recent Retrogression, and the Way Forward

Ramgopal Agarwala and Brahm Prakash,October 2002

No. 29 How can Cambodia, Lao PDR, Myanmar, and VietNam Cope with Revenue Lost Due to AFTA TariffReductions?

Kanokpan Lao-Araya, November 2002No. 30 Asian Regionalism and Its Effects on Trade in the

1980s and 1990s

Ramon Clarete, Christopher Edmonds, andJessica Seddon Wallack, November 2002

No. 31 New Economy and the Effects of Industrial

Structures on International Equity MarketCorrelations

Cyn-Young Park and Jaejoon Woo, December2002

No. 32 Leading Indicators of Business Cycles in Malaysiaand the Philippines

Wenda Zhang and Juzhong Zhuang, December2002

No. 33 Technological Spillovers from Foreign DirectInvestmentA Survey

Emma Xiaoqin Fan, December 2002


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14

No. 34 Economic Openness and Regional Development in

the Philippines

Ernesto M. Pernia and Pilipinas F. Quising,January 2003

No. 35 Bond Market Development in East Asia:Issues and Challenges

Raul Fabella and Srinivasa Madhur, January2003

No. 36 Environment Statistics in Central Asia: Progressand Prospects

Robert Ballance and Bishnu D. Pant, March

2003No. 37 Electricity Demand in the Peoples Republic ofChina: Investment Requirement andEnvironmental Impact

Bo Q. Lin, March 2003No. 38 Foreign Direct Investment in Developing Asia:

Trends, Effects, and Likely Issues for theForthcoming WTO Negotiations

Douglas H. Brooks, Emma Xiaoqin Fan,and Lea R. Sumulong, April 2003

No. 39 The Political Economy of Good Governance for

Poverty Alleviation Policies

Narayan Lakshman, April 2003No. 40 The Puzzle of Social Capital

A Critical Review

M. G. Quibria, May 2003No. 41 Industrial Structure, Technical Change, and the

Role of Government in Development of theElectronics and Information Industry inTaipei,China

Yeo Lin, May 2003No. 42 Economic Growth and Poverty Reduction

in Viet Nam

Arsenio M. Balisacan, Ernesto M. Pernia, andGemma Esther B. Estrada, June 2003

No. 43 Why Has Income Inequality in ThailandIncreased? An Analysis Using 1975-1998 Surveys

Taizo Motonishi, June 2003No. 44 Welfare Impacts of Electricity Generation Sector

Reform in the Philippines

Natsuko Toba, June 2003No. 45 A Review of Commitment Savings Products in


Nava Ashraf, Nathalie Gons, Dean S. Karlan,

and Wesley Yin, July 2003No. 46 Local Government Finance, Private Resources,and Local Credit Markets in Asia

Roberto de Vera and Yun-Hwan Kim, October2003

No. 47 Excess Investment and Efficiency Loss DuringReforms: The Case of Provincial-level Fixed-AssetInvestment in Peoples Republic of China

Duo Qin and Haiyan Song, October 2003No. 48 Is Export-led Growth Passe? Implications for

Developing Asia

Jesus Felipe, December 2003No. 49 Changing Bank Lending Behavior and Corporate

Financing in AsiaSome Research Issues

Emma Xiaoqin Fan and Akiko Terada-Hagiwara,December 2003

No. 50 Is Peoples Republic of Chinas Rising Services

Sector Leading to Cost Disease?Duo Qin, March 2004

No. 51 Poverty Estimates in India: Some Key Issues

Savita Sharma, May 2004No. 52 Restructuring and Regulatory Reform in the Power

Sector: Review of Experience and Issues

Peter Choynowski, May 2004No. 53 Competitiveness, Income Distribution, and Growth

in the Philippines: What Does the Long-runEvidence Show?

Jesus Felipe and Grace C. Sipin, June 2004

No. 54 Practices of Poverty Measurement and Poverty

Profile of Bangladesh

Faizuddin Ahmed, August 2004No. 55 Experience of Asian Asset Management

Companies: Do They Increase Moral Hazard?Evidence from Thailand

Akiko Terada-Hagiwara and Gloria Pasadilla,September 2004

No. 56 Viet Nam: Foreign Direct Investment andPostcrisis Regional Integration

Vittorio Leproux and Douglas H. Brooks,

September 2004No. 57 Practices of Poverty Measurement and PovertyProfile of Nepal

Devendra Chhetry, September 2004No. 58 Monetary Poverty Estimates in Sri Lanka:

Selected Issues

Neranjana Gunetilleke and DinushkaSenanayake, October 2004

No. 59 Labor Market Distortions, Rural-Urban Inequality,and the Opening of Peoples Republic of ChinasEconomy

Thomas Hertel and Fan Zhai, November 2004No. 60 Measuring Competitiveness in the Worlds Smallest

Economies: Introducingthe SSMECIGaneshan Wignaraja and David Joiner, November2004

No. 61 Foreign Exchange Reserves, Exchange Rate

Regimes, and Monetary Policy: Issues in AsiaAkiko Terada-Hagiwara, January 2005

No. 62 A Small Macroeconometric Model of the Philippine

Economy

Geoffrey Ducanes, Marie Anne Cagas, Duo Qin,Pilipinas Quising, and Nedelyn Magtibay-Ramos,January 2005

No. 63 Developing the Market for Local Currency Bondsby Foreign Issuers: Lessons from Asia

Tobias Hoschka, February 2005No. 64 Empirical Assessment of Sustainability and

Feasibility of Government Debt: The PhilippinesCase

Duo Qin, Marie Anne Cagas, Geoffrey Ducanes,Nedelyn Magtibay-Ramos, and Pilipinas Quising,February 2005

No. 65 Poverty and Foreign Aid

Evidence from Cross-Country DataAbuzar Asra, Gemma Estrada, Yangseom Kim,and M. G. Quibria, March 2005

No. 66 Measuring Efficiency of Macro Systems: AnApplication to Millennium Development Goal

Attainment

Ajay Tandon, March 2005No. 67 Banks and Corporate Debt Market Development

Paul Dickie and Emma Xiaoqin Fan, April 2005No. 68 Local Currency FinancingThe Next Frontier for

MDBs?

Tobias C. Hoschka, April 2005No. 69 Export or Domestic-Led Growth in Asia?

Jesus Felipe and Joseph Lim, May 2005No. 70 Policy Reform in Viet Nam and the Asian

Development Banks State-owned EnterpriseReform and Corporate Governance Program Loan

George Abonyi, August 2005No. 71 Policy Reform in Thailand and the Asian

Development Banks Agricultural Sector Program

LoanGeorge Abonyi, September 2005

No. 72 Can the Poor Benefit from the Doha Agenda? TheCase of Indonesia

Douglas H. Brooks and Guntur Sugiyarto,October 2005

No. 73 Impacts of the Doha Development Agenda on

Peoples Republic of China: The Role ofComplementary Education Reforms


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15

Fan Zhai and Thomas Hertel, October 2005No. 74 Growth and Trade Horizons for Asia: Long-term

Forecasts for Regional Integration

David Roland-Holst, Jean-Pierre Verbiest, andFan Zhai, November 2005

No. 75 Macroeconomic Impact of HIV/AIDS in the Asianand Pacific Region

Ajay Tandon, November 2005No. 76 Policy Reform in Indonesia and the Asian

Development Banks Financial Sector Governance

Reforms Program Loan

George Abonyi, December 2005No. 77 Dynamics of Manufacturing Competitiveness inSouth Asia: ANalysis through Export Data

Hans-Peter Brunner and Massimiliano Cal,December 2005

No. 78 Trade Facilitation

Teruo Ujiie, January 2006No. 79 An Assessment of Cross-country Fiscal

Consolidation

Bruno Carrasco and Seung Mo Choi,February 2006

No. 80 Central Asia: Mapping Future Prospects to 2015

Malcolm Dowling and Ganeshan Wignaraja,April 2006

No. 81 A Small Macroeconometric Model of the PeoplesRepublic of ChinaDuo Qin, Marie Anne Cagas, Geoffrey Ducanes,

Nedelyn Magtibay-Ramos, Pilipinas Quising, Xin-Hua He, Rui Liu, and Shi-Guo Liu, June 2006No. 82 Institutions and Policies for Growth and Poverty

Reduction: The Role of Private Sector DevelopmentRana Hasan, Devashish Mitra, and MehmetUlubasoglu, July 2006

No. 83 Preferential Trade Agreements in Asia:

Alternative Scenarios of Hub and Spoke

Fan Zhai, October 2006No. 84 Income Disparity and Economic Growth: Evidence

from Peoples Republic of China

Duo Qin, Marie Anne Cagas, Geoffrey Ducanes,Xinhua He, Rui Liu, and Shiguo Liu, October 2006

No. 85 Macroeconomic Effects of Fiscal Policies: Empirical

Evidence from Bangladesh, Peoples Republic ofChina, Indonesia, and Philippines

Geoffrey Ducanes, Marie Anne Cagas, Duo Qin,Pilipinas Quising, and Mohammad AbdurRazzaque, November 2006

No. 86 Economic Growth, Technological Change, and

Patterns of Food and Agricultural Trade in Asia

Thomas W. Hertel, Carlos E. Ludena, and AllaGolub, November 2006

No. 87 Expanding Access to Basic Services in Asia and the

Pacific Region: PublicPrivate Partnerships forPoverty Reduction

Adrian T. P. Panggabean, November 2006No. 88 Income Volatility and Social Protection in

Developing Asia

Vandana Sipahimalani-Rao, November 2006No. 89 Rules of Origin: Conceptual Explorations and

Lessons from the Generalized System of

Preferences

Teruo Ujiie, December 2006No. 90 Asias Imprint on Global Commodity Markets

Cyn-Young Park and Fan Zhai, December 2006No. 91 Infrastructure as a Catalyst for Regional

Integration, Growth, and Economic Convergence:

Scenario Analysis for Asia

David Roland-Holst, December 2006No. 92 Measuring Underemployment: Establishing the

Cut-off PointGuntur Sugiyarto, March 2007

No. 93 An Analysis of the Philippine Business Process

Outsourcing Industry

Nedelyn Magtibay-Ramos, Gemma Estrada, andJesus Felipe, March 2007

No. 94 Theory and Practice in the Choice of Social

Discount Rate for CostBenefit Analysis: A Survey

Juzhong Zhuang, Zhihong Liang, Tun Lin, andFranklin De Guzman, May 2007

No. 95 Can East Asia Weather a US Slowdown?

Cyn-Young Park, June 2007

ERD TECHNICAL NOTE SERIES (TNS)

(Published in-house; Available through ADB Office of External Relations; Free of Charge)

No. 1 Contingency Calculations for Environmental

Impacts with Unknown Monetary ValuesDavid Dole, February 2002

No. 2 Integrating Risk into ADBs Economic Analysis

of Projects

Nigel Rayner, Anneli Lagman-Martin,and Keith Ward, June 2002

No. 3 Measuring Willingness to Pay for Electricity

Peter Choynowski, July 2002No. 4 Economic Issues in the Design and Analysis of a

Wastewater Treatment Project

David Dole, July 2002No. 5 An Analysis and Case Study of the Role of

Environmental Economics at the AsianDevelopment Bank

David Dole and Piya Abeygunawardena,September 2002

No. 6 Economic Analysis of Health Projects: A Case Studyin Cambodia

Erik Bloom and Peter Choynowski, May 2003No. 7 Strengthening the Economic Analysis of Natural

Resource Management Projects

Keith Ward, September 2003

No. 8 Testing Savings Product Innovations Using an

Experimental Methodology

Nava Ashraf, Dean S. Karlan, and Wesley Yin,November 2003

No. 9 Setting User Charges for Public Services: Policiesand Practice at the Asian Development Bank

David Dole, December 2003No. 10 Beyond Cost Recovery: Setting User Charges for

Financial, Economic, and Social Goals

David Dole and Ian Bartlett, January 2004No. 11 Shadow Exchange Rates for Project Economic

Analysis: Toward Improving Practice at the AsianDevelopment Bank

Anneli Lagman-Martin, February 2004No. 12 Improving the Relevance and Feasibility of

Agriculture and Rural Development Operational

Designs: How Economic Analyses Can Help

Richard Bolt, September 2005No. 13 Assessing the Use of Project Distribution and

Poverty Impact Analyses at the Asian Development

BankFranklin D. De Guzman, October 2005

No. 14 Assessing Aid for a Sector Development Plan:

Economic Analysis of a Sector Loan

David Dole, November 2005


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No. 15 Debt Management Analysis of Nepals Public Debt

Sungsup Ra, Changyong Rhee, and Joon-HoHahm, December 2005

No. 16 Evaluating Microfinance Program Innovation with

Randomized Control Trials: An Example fromGroup Versus Individual Lending

Xavier Gin, Tomoko Harigaya,Dean Karlan, andBinh T. Nguyen, March 2006

No. 17 Setting User Charges for Urban Water Supply: ACase Study of the Metropolitan Cebu Water

District in the Philippines

David Dole and Edna Balucan, June 2006No. 18 Forecasting Inflation and GDP Growth: AutomaticLeading Indicator (ALI) Method versus MacroEconometric Structural Models (MESMs)

Marie Anne Cagas, Geoffrey Ducanes, Nedelyn

Magtibay-Ramos, Duo Qin and Pilipinas Quising,July 2006

No. 19 Willingness-to-Pay and Design of Water Supplyand Sanitation Projects: A Case Study

Herath Gunatilake, Jui-Chen Yang, SubhrenduPattanayak, and Caroline van den Berg,December 2006

No. 20 Tourism for Pro-Poor and Sutainable Growth:Economic Analysis of ADB Tourism Projects

Tun Lin and Franklin D. De Guzman,January 2007

No. 21 Critical Issues of Fiscal DecentralizationNorio Usui, February 2007No. 22 Pro-Poor Growth: Concepts and Measures

Hyun H. Son, June 2007

No. 1 Is Growth Good Enough for the Poor?

Ernesto M. Pernia, October 2001No. 2 Indias Economic Reforms

What Has Been Accomplished?What Remains to Be Done?

Arvind Panagariya, November 2001No. 3 Unequal Benefits of Growth in Viet Nam

Indu Bhushan, Erik Bloom, and Nguyen MinhThang, January 2002

No. 4 Is Volatility Built into Todays World Economy?

J. Malcolm Dowling and J.P. Verbiest,February 2002

No. 5 What Else Besides Growth Matters to PovertyReduction? Philippines

Arsenio M. Balisacan and Ernesto M. Pernia,February 2002

No. 6 Achieving the Twin Objectives of Efficiency and

Equity: Contracting Health Services in Cambodia

Indu Bhushan, Sheryl Keller, and Brad Schwartz,March 2002

No. 7 Causes of the 1997 Asian Financial Crisis: WhatCan an Early Warning System Model Tell Us?

Juzhong Zhuang and Malcolm Dowling,June 2002

No. 8 The Role of Preferential Trading Arrangementsin Asia

Christopher Edmonds and Jean-Pierre Verbiest,July 2002

No. 9 The Doha Round: A Development Perspective

Jean-Pierre Verbiest, Jeffrey Liang, and LeaSumulong, July 2002

No. 10 Is Economic Openness Good for Regional

Development and Poverty Reduction? ThePhilippinesE. M. Pernia and Pilipinas Quising, October2002

No. 11 Implications of a US Dollar Depreciation for Asian

Developing CountriesEmma Fan, July 2002

No. 12 Dangers of Deflation

D. Brooks and Pilipinas Quising, December 2002No. 13 Infrastructure and Poverty Reduction

What is the Connection?

Ifzal Ali and Ernesto Pernia, January 2003No. 14 Infrastructure and Poverty Reduction

Making Markets Work for the Poor

Xianbin Yao, May 2003No. 15 SARS: Economic Impacts and Implications

Emma Xiaoqin Fan, May 2003

No. 16 Emerging Tax Issues: Implications of Globalizationand Technology

Kanokpan Lao Araya, May 2003

No. 17 Pro-Poor Growth: What is It and Why is ItImportant?

Ernesto M. Pernia, May 2003No. 18 PublicPrivate Partnership for Competitiveness

Jesus Felipe, June 2003No. 19 Reviving Asian Economic Growth Requires Further

Reforms

Ifzal Ali, June 2003No. 20 The Millennium Development Goals and Poverty:

Are We Counting the Worlds Poor Right?M. G. Quibria, July 2003

No. 21 Trade and Poverty: What are the Connections?

Douglas H. Brooks, July 2003No. 22 Adapting Education to the Global Economy

Olivier Dupriez, September 2003No. 23 Avian Flu: An Economic Assessment for Selected

Developing Countries in Asia

Jean-Pierre Verbiest and Charissa Castillo,March 2004

No. 25 Purchasing Power Parities and the International

Comparison Program in a Globalized World

Bishnu Pant, March 2004No. 26 A Note on Dual/Multiple Exchange Rates

Emma Xiaoqin Fan, May 2004No. 27 Inclusive Growth for Sustainable Poverty Reduction

in Developing Asia: The Enabling Role of

Infrastructure DevelopmentIfzal Ali and Xianbin Yao, May 2004

No. 28 Higher Oil Prices: Asian Perspectives and

Implications for 2004-2005

Cyn-Young Park, June 2004No. 29 Accelerating Agriculture and Rural Development for

Inclusive Growth: Policy Implications forDeveloping Asia

Richard Bolt, July 2004No. 30 Living with Higher Interest Rates: Is Asia Ready?

Cyn-Young Park, August 2004No. 31 Reserve Accumulation, Sterilization, and Policy

Dilemma

Akiko Terada-Hagiwara, October 2004No. 32 The Primacy of Reforms in the Emergence of

Peoples Republic of China and India

Ifzal Ali and Emma Xiaoqin Fan, November2004

ERD POLICY BRIEF SERIES (PBS)

(Published in-house; Available through ADB Office of External Relations; Free of charge)


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17

1. Improving Domestic Resource Mobilization Through

Financial Development: Overview September 19852. Improving Domestic Resource Mobilization Through

Financial Development: Bangladesh July 19863. Improving Domestic Resource Mobilization Through

Financial Development: Sri Lanka April 19874. Improving Domestic Resource Mobilization Through

Financial Development: India December 19875. Financing Public Sector Development Expenditure

in Selected Countries: Overview January 19886. Study of Selected Industries: A Brief Report

April 19887. Financing Public Sector Development Expenditure

in Selected Countries: Bangladesh June 19888. Financing Public Sector Development Expenditure

in Selected Countries: India June 19889. Financing Public Sector Development Expenditure

in Selected Countries: Indonesia June 198810. Financing Public Sector Development Expenditure

in Selected Countries: Nepal June 198811. Financing Public Sector Development Expenditure

in Selected Countries: Pakistan June 198812. Financing Public Sector Development Expenditure

in Selected Countries: Philippines June 198813. Financing Public Sector Development Expenditure

in Selected Countries: Thailand June 198814. Towards Regional Cooperation in South Asia:

ADB/EWC Symposium on Regional Cooperation

in South Asia February 198815. Evaluating Rice Market Intervention Policies:

Some Asian Examples April 198816. Improving Domestic Resource Mobilization Through

Financial Development: Nepal November 198817. Foreign Trade Barriers and Export Growth September

198818. The Role of Small and Medium-Scale Industries in the

Industrial Development of the Philippines April 1989

19. The Role of Small and Medium-Scale Manufacturing

Industries in Industrial Development: The Experience ofSelected Asian Countries January 1990

20. National Accounts of Vanuatu, 1983-1987 January1990

21. National Accounts of Western Samoa, 1984-1986

February 199022. Human Resource Policy and Economic Development:

Selected Country Studies July 199023. Export Finance: Some Asian Examples September 199024. National Accounts of the Cook Islands, 1982-1986

September 199025. Framework for the Economic and Financial Appraisal of

Urban Development Sector Projects January 199426. Framework and Criteria for the Appraisal and

Socioeconomic Justification of Education Projects

January 199427. Investing in Asia 1997 (Co-published with OECD)28. The Future of Asia in the World Economy 1998 (Co-

published with OECD)29. Financial Liberalisation in Asia: Analysis and Prospects

1999 (Co-published with OECD)30. Sustainable Recovery in Asia: Mobilizing Resources for

Development2000 (Co-published with OECD)31. Technology and Poverty Reduction in Asia and the Pacific

2001 (Co-published with OECD)32. Asia and Europe2002 (Co-published with OECD)33. Economic Analysis: Retrospective200334. Economic Analysis: Retrospective: 2003 Update200435. Development Indicators Reference Manual: Concepts and

Definitions200435. Investment Climate and Productivity Studies

Philippines: Moving Toward a Better Investment Climate

2005The Road to Recovery: Improving the Investment Climate

in Indonesia 2005Sri Lanka: Improving the Rural and Urban InvestmentClimate 2005

SPECIAL STUDIES, COMPLIMENTARY

(Available through ADB Office of External Relations)

No. 33 Population Health and Foreign Direct Investment:

Does Poor Health Signal Poor GovernmentEffectiveness?Ajay Tandon, January 2005

No. 34 Financing Infrastructure Development: AsianDeveloping Countries Need to Tap Bond MarketsMore Rigorously

Yun-Hwan Kim, February 2005No. 35 Attaining Millennium Development Goals in

Health: Isnt Economic Growth Enough?

Ajay Tandon, March 2005

No. 36 Instilling Credit Culture in State-owned BanksExperience from Lao PDR

Robert Boumphrey, Paul Dickie, and SamiuelaTukuafu, April 2005

No. 37 Coping with Global Imbalances and Asian

Currencies

Cyn-Young Park, May 2005No. 38 Asias Long-term Growth and Integration:

Reaching beyond Trade Policy Barriers

Douglas H. Brooks, David Roland-Holst, and FanZhai, September 2005

No. 39 Competition Policy and Development

Douglas H. Brooks, October 2005No. 40 Highlighting Poverty as Vulnerability: The 2005

Earthquake in Pakistan

Rana Hasan and Ajay Tandon, October 2005No. 41 Conceptualizing and Measuring Poverty as

Vulnerability: Does It Make a Difference?

Ajay Tandon and Rana Hasan, October 2005No. 42 Potential Economic Impact of an Avian Flu

Pandemic on Asia

Erik Bloom, Vincent de Wit, and Mary JaneCarangal-San Jose, November 2005

No. 43 Creating Better and More Jobs in Indonesia: ABlueprint for Policy Action

Guntur Sugiyarto, December 2005

No. 44 The Challenge of Job Creation in AsiaJesus Felipe and Rana Hasan, April 2006No. 45 International Payments Imbalances

Jesus Felipe, Frank Harrigan, and AashishMehta, April 2006

No. 46 Improving Primary Enrollment Rates among thePoor

Ajay Tandon, August 2006No. 47 Inclusiveness of Economic Growth in the Peoples

Republic of China: What Do Population HealthOutcomes Tell Us?

Ajay Tandon and Juzhong Zhuang, January2007

No. 48 Pro-Poor to Inclusive Growth: Asian Prescriptions

Ifzal Ali, May 2007


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OLD MONOGRAPH SERIES

(Available through ADB Office of External Relations; Free of charge)

EDRC REPORT SERIES (ER)

No. 1 ASEAN and the Asian Development BankSeiji Naya, April 1982

No. 2 Development Issues for the Developing Eastand Southeast Asian Countriesand International Cooperation

Seiji Naya and Graham Abbott, April 1982No. 3 Aid, Savings, and Growth in the Asian Region

J. Malcolm Dowling and Ulrich Hiemenz,April 1982

No. 4 Development-oriented Foreign Investmentand the Role of ADB

Kiyoshi Kojima, April 1982No. 5 The Multilateral Development Banks

and the International Economys Missing

Public SectorJohn Lewis, June 1982

No. 6 Notes on External Debt of DMCs

Evelyn Go, July 1982No. 7 Grant Element in Bank Loans

Dal Hyun Kim, July 1982No. 8 Shadow Exchange Rates and Standard

Conversion Factors in Project EvaluationPeter Warr, September 1982

No. 9 Small and Medium-Scale Manufacturing

Establishments in ASEAN Countries:Perspectives and Policy IssuesMathias Bruch and Ulrich Hiemenz, January1983

No. 10 A Note on the Third Ministerial Meeting of GATTJungsoo Lee, January 1983

No. 11 Macroeconomic Forecasts for the Republicof China, Hong Kong, and Republic of KoreaJ.M. Dowling, January 1983

No. 12 ASEAN: Economic Situation and ProspectsSeiji Naya, March 1983

No. 13 The Future Prospects for the Developing

Countries of Asia

Seiji Naya, March 1983No. 14 Energy and Structural Change in the Asia-Pacific Region, Summary of the ThirteenthPacific Trade and Development ConferenceSeiji Naya, March 1983

No. 15 A Survey of Empirical Studies on Demandfor Electricity with Special Emphasis on PriceElasticity of Demand

Wisarn Pupphavesa, June 1983No. 16 Determinants of Paddy Production in Indonesia:

1972-1981A Simultaneous Equation Model

ApproachT.K. Jayaraman, June 1983

No. 17 The Philippine Economy: Economic

Forecasts for 1983 and 1984J.M. Dowling, E. Go, and C.N. Castillo, June1983

No. 18 Economic Forecast for IndonesiaJ.M. Dowling, H.Y. Kim, Y.K. Wang,and C.N. Castillo, June 1983

No. 19 Relative External Debt Situation of Asian

Developing Countries: An Applicationof Ranking MethodJungsoo Lee, June 1983

No. 20 New Evidence on Yields, Fertilizer Application,and Prices in Asian Rice ProductionWilliam James and Teresita Ramirez, July 1983

No. 21 Inflationary Effects of Exchange RateChanges in Nine Asian LDCs

Pradumna B. Rana and J. Malcolm Dowling, Jr.,December 1983

No. 22 Effects of External Shocks on the Balanceof Payments, Policy Responses, and DebtProblems of Asian Developing Countries

Seiji Naya, December 1983No. 23 Changing Trade Patterns and Policy Issues:

The Prospects for East and Southeast Asian

Developing CountriesSeiji Naya and Ulrich Hiemenz, February 1984

No. 24 Small-Scale Industries in Asian Economic

Development: Problems and ProspectsSeiji Naya, February 1984

No. 25 A Study on the External Debt Indicators

Applying Logit AnalysisJungsoo Lee and Clarita Barretto, February 1984

No. 26 Alternatives to Institutional Credit Programs

in the Agricultural Sector of Low-IncomeCountriesJennifer Sour, March 1984

No. 27 Economic Scene in Asia and Its Special FeaturesKedar N. Kohli, November 1984

No. 28 The Effect of Terms of Trade Changes on theBalance of Payments and Real National

Income of Asian Developing CountriesJungsoo Lee and Lutgarda Labios, January 1985

No. 29 Cause and Effect in the World Sugar Market:

Some Empirical Findings 1951-1982Yoshihiro Iwasaki, February 1985

No. 30 Sources of Balance of Payments Problem

in the 1970s: The Asian ExperiencePradumna Rana, February 1985

No. 31 Indias Manufactured Exports: An Analysis

of Supply SectorsIfzal Ali, February 1985

No. 32 Meeting Basic Human Needs in Asian


Jungsoo Lee and Emma Banaria, March 1985No. 33 The Impact of Foreign Capital Inflowon Investment and Economic Growthin Developing AsiaEvelyn Go, May 1985

No. 34 The Climate for Energy Developmentin the Pacific and Asian Region:Priorities and Perspectives

V.V. Desai, April 1986No. 35 Impact of Appreciation of the Yen on

Developing Member Countries of the Bank

Jungsoo Lee, Pradumna Rana, and Ifzal Ali,May 1986

No. 36 Smuggling and Domestic Economic Policies

in Developing CountriesA.H.M.N. Chowdhury, October 1986

No. 37 Public Investment Criteria: Economic Internal

Rate of Return and Equalizing Discount RateIfzal Ali, November 1986No. 38 Review of the Theory of Neoclassical Political

Economy: An Application to Trade Policies

M.G. Quibria, December 1986No. 39 Factors Influencing the Choice of Location:

Local and Foreign Firms in the Philippines

E.M. Pernia and A.N. Herrin, February 1987No. 40 A Demographic Perspective on Developing

Asia and Its Relevance to the Bank

E.M. Pernia, May 1987


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19

No. 1 International Reserves:

Factors Determining Needs and AdequacyEvelyn Go, May 1981

No. 2 Domestic Savings in Selected Developing

Asian CountriesBasil Moore, assisted by A.H.M. NuruddinChowdhury, September 1981

No. 3 Changes in Consumption, Imports and Exportsof Oil Since 1973: A Preliminary Survey ofthe Developing Member Countries

of the Asian Development BankDal Hyun Kim and Graham Abbott, September

1981No. 4 By-Passed Areas, Regional Inequalities,

and Development Policies in SelectedSoutheast Asian CountriesWilliam James, October 1981

No. 5 Asian Agriculture and Economic DevelopmentWilliam James, March 1982

No. 6 Inflation in Developing Member Countries:

An Analysis of Recent TrendsA.H.M. Nuruddin ChowdhuryandJ. MalcolmDowling,March 1982

No. 7 Industrial Growth and Employment inDeveloping Asian Countries: Issues and

ECONOMIC STAFF PAPERS (ES)

Perspectives for the Coming Decade

Ulrich Hiemenz, March 1982No. 8 Petrodollar Recycling 1973-1980.

Part 1: Regional Adjustments and

the World EconomyBurnham Campbell, April 1982

No. 9 Developing Asia: The Importance

of Domestic PoliciesEconomics Office Staff under the direction of SeijiNaya, May 1982

No. 10 Financial Development and HouseholdSavings: Issues in Domestic Resource

Mobilization in Asian Developing CountriesWan-Soon Kim, July 1982

No. 11 Industrial Development: Role of SpecializedFinancial InstitutionsKedar N. Kohli, August 1982

No. 12 Petrodollar Recycling 1973-1980.Part II: Debt Problems and an Evaluationof Suggested Remedies

Burnham Campbell, September 1982No. 13 Credit Rationing, Rural Savings, and Financial

Policy in Developing Countries

William James, September 1982

No. 41 Emerging Issues in Asia and Social Cost

Benefit AnalysisI. Ali, September 1988

No. 42 Shifting Revealed Comparative Advantage:

Experiences of Asian and Pacific DevelopingCountriesP.B. Rana, November 1988

No. 43 Agricultural Price Policy in Asia:Issues and Areas of ReformsI. Ali, November 1988

No. 44 Service Trade and Asian Developing Economies

M.G. Quibria, October 1989No. 45 A Review of the Economic Analysis of PowerProjects in Asia and Identification of Areasof ImprovementI. Ali, November 1989

No. 46 Growth Perspective and Challenges for Asia:Areas for Policy Review and ResearchI. Ali, November 1989

No. 47 An Approach to Estimating the PovertyAlleviation Impact of an Agricultural ProjectI. Ali, January 1990

No. 48 Economic Growth Performance of Indonesia,the Philippines, and Thailand:The Human Resource Dimension

E.M. Pernia, January 1990No. 49 Foreign Exchange and Fiscal Impact of a Project:

A Methodological Framework for Estimation

I. Ali, February 1990No. 50 Public Investment Criteria: Financialand Economic Internal Rates of Return

I. Ali, April 1990No. 51 Evaluation of Water Supply Projects:

An Economic FrameworkArlene M. Tadle, June 1990

No. 52 Interrelationship Between Shadow Prices, ProjectInvestment, and Policy Reforms:An Analytical Framework

I. Ali, November 1990No. 53 Issues in Assessing the Impact of Project

and Sector Adjustment Lending

I. Ali, December 1990No. 54 Some Aspects of Urbanization

and the Environment in Southeast Asia

Ernesto M. Pernia, January 1991

No. 55 Financial Sector and Economic

Development: A SurveyJungsoo Lee, September 1991

No. 56 A Framework for Justifying Bank-Assisted

Education Projects in Asia: A Reviewof the Socioeconomic Analysisand Identification of Areas of Improvement

Etienne Van De Walle, February 1992No. 57 Medium-term Growth-Stabilization

Relationship in Asian Developing Countries

and Some Policy Considerations

Yun-Hwan Kim, February 1993No. 58 Urbanization, Population Distribution,and Economic Development in AsiaErnesto M. Pernia, February 1993

No. 59 The Need for Fiscal Consolidation in Nepal:

The Results of a SimulationFilippo di Mauro and Ronald Antonio Butiong,July 1993

No. 60 A Computable General Equilibrium Modelof NepalTimothy Buehrer and Filippo di Mauro, October1993

No. 61 The Role of Government in Export Expansionin the Republic of Korea: A Revisit

Yun-Hwan Kim, February 1994No. 62 Rural Reforms, Structural Change,

and Agricultural Growth in

the Peoples Republic of ChinaBo Lin, August 1994

No. 63 Incentives and Regulation for Pollution Abatement

with an Application to Waste Water TreatmentSudipto Mundle, U. Shankar, and ShekharMehta, October 1995

No. 64 Saving Transitions in Southeast Asia

Frank Harrigan, February 1996No. 65 Total Factor Productivity Growth in East Asia:

A Critical Survey

Jesus Felipe, September 1997No. 66 Foreign Direct Investment in Pakistan:

Policy Issues and Operational Implications

Ashfaque H. Khan and Yun-Hwan Kim, July1999

No. 67 Fiscal Policy, Income Distribution and Growth

Sailesh K. Jha, November 1999


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20

No. 14 Small and Medium-Scale Manufacturing

Establishments in ASEAN Countries:Perspectives and Policy IssuesMathias Bruch and Ulrich Hiemenz, March 1983

No. 15 Income Distribution and EconomicGrowth in Developing Asian CountriesJ. Malcolm Dowling and David Soo, March 1983

No. 16 Long-Run Debt-Servicing Capacity ofAsian Developing Countries: An Applicationof Critical Interest Rate Approach

Jungsoo Lee, June 1983

No. 17 External Shocks, Energy Policy,and Macroeconomic Performance of Asian

Developing Countries: A Policy AnalysisWilliam James, July 1983

No. 18 The Impact of the Current Exchange Rate

System on Trade and Inflation of SelectedDeveloping Member CountriesPradumna Rana, September 1983

No. 19 Asian Agriculture in Transition: Key Policy IssuesWilliam James, September 1983

No. 20 The Transition to an Industrial Economy

in Monsoon AsiaHarry T. Oshima, October 1983

No. 21 The Significance of Off-Farm Employment

and Incomes in Post-War East Asian GrowthHarry T. Oshima, January 1984

No. 22 Income Distribution and Poverty in Selected

Asian CountriesJohn Malcolm Dowling, Jr., November 1984

No. 23 ASEAN Economies and ASEAN Economic

CooperationNarongchai Akrasanee, November 1984

No. 24 Economic Analysis of Power ProjectsNitin Desai, January 1985

No. 25 Exports and Economic Growth in the Asian RegionPradumna Rana, February 1985

No. 26 Patterns of External Financing of DMCs

E. Go, May 1985No. 27 Industrial Technology Development

the Republic of Korea

S.Y. Lo, July 1985No. 28 Risk Analysis and Project Selection:

A Review of Practical Issues

J.K. Johnson, August 1985

No. 29 Rice in Indonesia: Price Policy and ComparativeAdvantage

I. Ali, January 1986No. 30 Effects of Foreign Capital Inflows

on Developing Countries of Asia

Jungsoo Lee, Pradumna B. Rana, and YoshihiroIwasaki, April 1986

No. 31 Economic Analysis of the Environmental

Impacts of Development ProjectsJohn A. Dixon et al., EAPI, East-West Center,August 1986

No. 32 Science and Technology for Development:Role of the BankKedar N. Kohli and Ifzal Ali, November 1986

No. 33 Satellite Remote Sensing in the Asianand Pacific RegionMohan Sundara Rajan, December 1986

No. 34 Changes in the Export Patterns of Asian andPacific Developing Countries: An EmpiricalOverview

Pradumna B. Rana, January 1987No. 35 Agricultural Price Policy in Nepal

Gerald C. Nelson, March 1987No. 36 Implications of Falling Primary Commodity

Prices for Agricultural Strategy in the PhilippinesIfzal Ali, September 1987

No. 37 Determining Irrigation Charges: A Framework

Prabhakar B. Ghate, October 1987No. 38 The Role of Fertilizer Subsidies in Agricultural

Production: A Review of Select Issues

M.G. Quibria, October 1987No. 39 Domestic Adjustment to External Shocks

in Developing AsiaJungsoo Lee, October 1987

No. 40 Improving Domestic Resource Mobilizationthrough Financial Development: IndonesiaPhilip Erquiaga, November 1987

No. 41 Recent Trends and Issues on Foreign DirectInvestment in Asian and Pacific DevelopingCountries

P.B. Rana, March 1988

No. 42 Manufactured Exports from the Philippines:A Sector Profile and an Agenda for Reform

I. Ali, September 1988No. 43 A Framework for Evaluating the Economic

Benefits of Power Projects

I. Ali, August 1989No. 44 Promotion of Manufactured Exports in Pakistan

Jungsoo Lee and Yoshihiro Iwasaki, September1989

No. 45 Education and Labor Markets in Indonesia:A Sector Survey

Ernesto M. Pernia and David N. Wilson,September 1989

No. 46 Industrial Technology Capabilities

and Policies in Selected ADCsHiroshi Kakazu, June 1990

No. 47 Designing Strategies and Policies

for Managing Structural Change in AsiaIfzal Ali, June 1990

No. 48 The Completion of the Single European Community

Market in 1992: A Tentative Assessment of itsImpact on Asian Developing CountriesJ.P. Verbiest and Min Tang, June 1991

No. 49 Economic Analysis of Investment in Power Systems

Ifzal Ali, June 1991No. 50 External Finance and the Role of Multilateral

Financial Institutions in South Asia:

Changing Patterns, Prospects, and ChallengesJungsoo Lee, November 1991

No. 51 The Gender and Poverty Nexus: Issues and

PoliciesM.G. Quibria, November 1993

No. 52 The Role of the State in Economic Development:

Theory, the East Asian Experience,

and the Malaysian CaseJason Brown, December 1993

No. 53 The Economic Benefits of Potable Water SupplyProjects to Households in Developing CountriesDale Whittington and Venkateswarlu Swarna,January 1994

No. 54 Growth Triangles: Conceptual Issuesand Operational Problems

Min Tang and Myo Thant, February 1994No. 55 The Emerging Global Trading Environment

and Developing Asia

Arvind Panagariya, M.G. Quibria, and NarhariRao, July 1996

No. 56 Aspects of Urban Water and Sanitation in

the Context of Rapid Urbanization inDeveloping Asia

Ernesto M. Pernia and Stella LF. Alabastro,

September 1997No. 57 Challenges for Asias Trade and Environment

Douglas H. Brooks, January 1998No. 58 Economic Analysis of Health Sector Projects-

A Review of Issues, Methods, and Approaches

Ramesh Adhikari, Paul Gertler, and AnneliLagman, March 1999

No. 59 The Asian Crisis: An Alternate View

Rajiv Kumar and Bibek Debroy, July 1999No. 60 Social Consequences of the Financial Crisis in

Asia

James C. Knowles, Ernesto M. Pernia, and MaryRacelis, November 1999


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21

No. 1 Estimates of the Total External Debt of

the Developing Member Countries of ADB:1981-1983I.P. David, September 1984

No. 2 Multivariate Statistical and GraphicalClassification Techniques Appliedto the Problem of Grouping Countries

I.P. David and D.S. Maligalig, March 1985No. 3 Gross National Product (GNP) Measurement

Issues in South Pacific Developing Member

Countries of ADBS.G. Tiwari, September 1985

No. 4 Estimates of Comparable Savings in Selected

DMCsHananto Sigit, December 1985

No. 5 Keeping Sample Survey Designand Analysis SimpleI.P. David, December 1985

No. 6 External Debt Situation in Asian

Developing CountriesI.P. David and Jungsoo Lee, March 1986

No. 7 Study of GNP Measurement Issues in the

South Pacific Developing Member Countries.Part I: Existing National Accountsof SPDMCsAnalysis of Methodologyand Application of SNA Concepts

P. Hodgkinson, October 1986

STATISTICAL REPORT SERIES (SR)

No. 8 Study of GNP Measurement Issues in the SouthPacific Developing Member Countries.

Part II: Factors Affecting IntercountryComparability of Per Capita GNPP. Hodgkinson, October 1986

No. 9 Survey of the External Debt Situationin Asian Developing Countries, 1985Jungsoo Lee and I.P. David, April 1987

No. 10 A Survey of the External Debt Situationin Asian Developing Countries, 1986Jungsoo Lee and I.P. David, April 1988

No. 11 Changing Pattern of Financial Flows to Asianand Pacific Developing CountriesJungsoo Lee and I.P. David, March 1989

No. 12 The State of Agricultural Statistics inSoutheast AsiaI.P. David, March 1989

No. 13 A Survey of the External Debt Situation

in Asian and Pacific Developing Countries:1987-1988Jungsoo Lee and I.P. David, July 1989

No. 14 A Survey of the External Debt Situation inAsian and Pacific Developing Countries: 1988-1989Jungsoo Lee, May 1990

No. 15 A Survey of the External Debt Situationin Asian and Pacific Developing Countries: 1989-1992

No. 1 Poverty in the Peoples Republic of China:Recent Developments and Scopefor Bank Assistance

K.H. Moinuddin, November 1992No. 2 The Eastern Islands of Indonesia: An Overview

of Development Needs and Potential

Brien K. Parkinson, January 1993No. 3 Rural Institutional Finance in Bangladesh

and Nepal: Review and Agenda for ReformsA.H.M.N. Chowdhury and Marcelia C. Garcia,November 1993

No. 4 Fiscal Deficits and Current Account Imbalances

of the South Pacific Countries:A Case Study of VanuatuT.K. Jayaraman, December 1993

No. 5 Reforms in the Transitional Economies of AsiaPradumna B. Rana, December 1993

No. 6 Environmental Challenges in the Peoples Republic

of China and Scope for Bank AssistanceElisabetta Capannelli and Omkar L. Shrestha,December 1993

No. 7 Sustainable Development Environmentand Poverty NexusK.F. Jalal, December 1993

No. 8 Intermediate Services and Econo

can east asia weather a us slowdown?

Documents