Menzie David Chinn's Books

The Economic Integration of Greater China

Real and Financial Linkages and the Prospects for Currency Union

By: Yin-Wong Cheung,Menzie D. Chinn,Eiji Fujii

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The Economic Integration of Greater China

Real and Financial Linkages and the Prospects for Currency Union

By: Yin-Wong Cheung,Menzie D. Chinn,Eiji Fujii

The tremendous success of China's program of economic reform and the rapid integration of China into the global economy have prompted this study on the economic and financial integration between mainland China, Hong Kong, and Taiwan – a grouping sometimes referred to as Greater China. While there has been a plethora of analyses of China's economic interactions with other economies, this book fills the need for a thorough investigation of regional financial and real interactions – corresponding to the many exhaustive studies of such interactions between developed countries and between East Asian countries. Since real and financial integration has substantial implications for the efficiency of resource allocation and the efficacy of macroeconomics policy, Cheung, Chinn and Fujii offer clear analysis of the current state of economic integration of Greater China, thereby helping to gauge the potential role of China in the global economy. Prospects of a currency union in Greater China, an extreme form of integration, are also evaluated with respect to benefits and costs to the three parties. In addition, the authors provide complementary discussions regarding the degree of integration between China and several Pacific Rim economies, including those of Japan, Korea, Singapore, and the United States. Cheung, Chinn and Fujii provide an up-to-date assessment of mainland China's economic development and its integration with its neighboring economies, especially Hong Kong and Taiwan. This grouping is also known as Greater China. There are a number of approaches to assessing economic integration, and the authors present some standard measures – including trade flows, output movements, saving and investment correlations, and consumption comovements. They emphasize the measures based on some key parity conditions in international finance – real interest parity, uncovered interest parity, and relative purchasing power parity. While there is no perfect empirical measure of economic integration, the theoretical relationships between integration and these three parity conditions are well founded in economics. Moreover, the three parity conditions constitute a unified framework that can be used to assess the degree of real and financial integration, and thus offer a convenient way to investigate the interaction between these two types of integration. In addition, the authors evaluate the prospect of a currency union in Greater China, the most extreme form of integration. Prospects of China's continued integration with the world economy, and the implications of policies in Beijing and other Pacific Rim capitals are also discussed.

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Page Count

184

Publisher

Hong Kong University Press

Published Date

ISBN 10

9622098223

ISBN 13

9789622098220

Real Exchange Rate Levels, Productivity and Demand Shocks

Evidence from a Panel of 14 Countries

By: Menzie David Chinn,Ms.Louis Dorrance Johnston

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Real Exchange Rate Levels, Productivity and Demand Shocks

Evidence from a Panel of 14 Countries

By: Menzie David Chinn,Ms.Louis Dorrance Johnston

We investigate the long-run relationship between the real exchange rate, traded and nontraded productivity levels, and government spending for 14 OECD countries, using recently developed panel cointegration tests. The results indicate that under certain assumptions it is easier to detect cointegration in panel data than in the available time series; moreover, the rate of reversion to long-run equilibrium is estimated with greater precision. Using the model augmented by oil prices, we find that in 1991 (the last year productivity data are available) there is less overvaluation of the U.S. dollar than that implied by a naive version of purchasing power parity.

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International Monetary Fund

Published Date

ISBN 10

1451962169

ISBN 13

9781451962161

Measuring Misalignment

Purchasing Power Parity and East Asian Currencies in the 1990s

By: Menzie David Chinn

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Measuring Misalignment

Purchasing Power Parity and East Asian Currencies in the 1990s

By: Menzie David Chinn

The concept of purchasing power parity (PPP) is used to evaluate whether eight East Asian currencies were overvalued on the eve of the 1997 crises. The Johansen and Horvath-Watson cointegration test procedures are applied to bilateral and multilateral exchange rates, deflated using CPIs, producer price indices (PPIs), and price indices of export goods. The second deflator yields the greatest evidence of “stationarity.” The study find’s that the Malaysian, Philippines, and Thai currencies were overvalued, while the Korean and Indonesian were substantially undervalued. Mixed results were obtained for the others. Measures of the equilibrium rate based on time trends in CPI-deflated rates typically suggest larger overvaluations.

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International Monetary Fund

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ISBN 10

1451854250

ISBN 13

9781451854251

Book's by Menzie David Chinn

The Economic Integration of Greater China

The Economic Integration of Greater China

Real Exchange Rate Levels, Productivity and Demand Shocks

Real Exchange Rate Levels, Productivity and Demand Shocks

Measuring Misalignment

Measuring Misalignment

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