As opposed to the Veblen-Gerschenkron catching-up hypothesis, the recent literature allows for technological divergence in backward economies. We extend a non-linear adoption function to include openness and interact with capital accumulation in an intertemporal general equilibrium framework. The threshold gap necessary to catch-up is endogenously determined by the economy’s absorptive capacity...

OnApril 1, 2002, the Japanese government lifted a blanket guarantee of all deposits and began limiting the coverage of time deposits. This paper uses this deposit insurance reform as a natural experiment to investigate the relationship between deposit insurance coverage and market discipline. I find that the reform raised the sensitivity of interest rates on deposits, and that of deposit quanti...

In a competitive and dynamic market, financial institutions must forecast the proportion of mortgages that will become delinquent, default or prepay. This paper develops a novel forecasting model with nonstationary Markov chain and Grey forecasting, capable of predicting the likelihood of delinquency, default and prepayment. Home mortgage data, obtained by a major Taiwan financial institution f...

A new, systematic and integrated way of building a national information and communication technology (ICT) frontier is proposed for countries specialized in ICT for export. Using patent citation as a proxy of interaction between technologies, a national ICT network is developed. Local core ICTs are identified by using two centrality measures and five brokerage measures. The importance in terms ...

Compared with its ASEAN neighbors, Vietnam appears to have weathered the Asian crisis quite well. Official statistics indicate a GDP growth rate of 6.6 per cent for the first half of 1998; export growth remains positive, and the dong has depreciated by only 20 per cent against the USD. But the relatively favorable picture has more to do with controls than with sound economic fundamentals. In th...

This paper presents an analytic framework with empirical evidence aiming to improve our understanding of the roles of foreign direct investment (FDI) in shaping productivity growth. Specifically, the study empirically examines the effects of FDI on China’s regional productivity growth. Our analyses based on two versions of our model, one excluding and one including human capital, show that FDI ...

This article examines exchange rate-based stabilization in an economy that has been badly destroyed by war or other calamities. The article does this in the context of post-civil war Lebanon. Both Iraq and Afghanistan are prime candidates for such a policy. This article first demonstrates the validity of the theory and empirical regularities (initial boom followed by an economic contraction) in...

This paper estimates the impact of China’s exchange rate changes on exports of competitor countries in third markets, which we call the “spillover effect”. We use recent theory to develop an identification strategy in which competition between China and its developing country competitors in specific products and destinations plays a key role. We exploit the variation—afforded by disaggregated t...

It has been widely recognized that China has had a large pool of surplus labour. However, despite its significant implications for wage levels and the Chinese economy, the current debates yield conflicting results as to whether the Lewis turning point has been reached. This paper clarifies a theoretical issue about the mechanisms of surplus labour absorption, subsequently indentifies two Lewis ...