Econometric Models of Asian-Pacific Countries

This book is a sequel to our first report of ASIAN LINK PROJECT in 1985: Econometric Models of Asian LINK, Springer-Verlag, Tokyo - Berlin - New York. Now the scope is expanded to Asian-Pacific Countries in coverage, so that this monograph presents the econometric models of Japan, the United States, Canada, China, Korea, Taiwan, Hong Kong, Thailand, the Philippines, Malaysia, Singa­ pore, Indonesia, Australia and the European Community. We are particularly happy to have included the excellent models of Australia and Canada whose economies are essential parts of the Asian-Pacific Economic Community. Most of those models were presented at the Workshop of Asian Link Project held in Bandung, Indonesia at the time of the Second Convention of the East Asian Eco­ nomic Association, 1990. Those models have been up-dated since then, and several other important models were added. Unlike our previous book, we have not tried here to link these national models as a regional or global model in any way, ex­ cept for the model by S. Kinoshita which offers a regional linkage for Pacific-basin economies by linking the US, Japan, Canada, the European Community coun­ tries as a group, Asian NIEs (Korea, Hong Kong, Taiwan), ASEAN (Indonesia, Malaysia, the Philippines, Singapore) and East Asian economies. As we argued in our previous publication, we tried to publish these econometric models again with the statistical data as much as we could, so as to enable the reader examine the estimation and performance of the models by himself.

1 Development of Econometric Models in Asian-Pacific Countries.- 2 The ICSEAD Japan-U.S.-ROW Model.- 1 Background.- 2 Theoretical Roots of the Model.- 2.1 Final Demand Block.- 2.2 Income Distribution and Fiscal Block.- 2.3 Production and Employment Block.- 2.4 Wage and Price Block.- 3 Model Validation.- 3.1 Forecast of History Test.- 3.2 Standard Multiplier Tests.- 3.3 Import Elasticity Measures.- 3.4 Simulation Properties.- 4 Trade Linkages.- 4.1 Exports.- 4.2 Imports.- 4.3 Trade Prices.- 4.4 The Rest of the World GDP.- 5 Remarks.- 3 Economy of China: 1969–89 A Macro-Econometric Model (CMD90).- 1 Introduction.- 1.1 The Economy of China.- 1.2 Statistical Data.- 2 Structure of the Model.- 2.1 Framework of the Model.- 2.2 Production.- 2.3 Final Demands.- 2.4 Public Finance and Money.- 2.5 Prices and Wage.- 2.6 Foreign Trade and Balance of Payments.- 3 Simulation.- Appendix A China Model System (CMD90).- B List of Variables-China Model CMD90.- C Data List (1969–89).- 4 A Quarterly Econometric Model of the Korean Economy.- 1 Introduction.- 2 Structure of the Model.- 3 Estimation.- 4 Historical Simulation.- 5 Policy Simulations.- Appendix A Model Specification and Estimation Results of the Quarterly KDI Model.- B List of Variables.- C The Data Used in KDI Quarterly Model 1991.3.28.- 5 Econometric Model for Simulation of Alternative External Trade Scenarios in Indonesia.- 1 Introduction.- 2 Model Structure and Estimation Result.- 2.1 Model Estimation.- 2.2 Identities.- 3 Model Simulation.- 4 Policy Simulation.- 4.1 20% Appreciation of Yen Agaisnst US Dollar (YENUS).- 4.2 10% Increase of Japan’s Imports, 10% Deacrease of US Imports and 10% Increase of EC’s Imports (Separate and Combined Scenario).- 4.3 50% Increase in Intra-ASEAN Trade.- 4.4 50% Tariff Reduction.- 4.5 High Oil Price (1982–1988 = US$34.5/Barrel).- 5 Conclusions.- Appendix A The Variables.- B Data.- 6 The Quest Model of the European Community.- 1 Introduction.- 2 General Framework.- 2.1 The Trade Linkage Model.- 2.2 The Treatment of Energy.- 2.3 The Sectors of the National Economy.- 3 The Trade Linkage Equations.- 3.1 The Bilateral Trade-relations.- 3.2 The Trade Feedback Equations.- 4 The Key Parameters of the Structural Models.- 4.1 The Components of Demand.- 4.2 The Supply Side.- 4.3 Wages and Prices.- 5 The Use of the Model.- 7 Hong Kong Model: The Revised 1990 Version.- 1 Introduction.- 2 The Model.- 2.1 Aggregate Demand.- 2.2 Labor Market and Wages (equations 23-25, 28).- 2.3 Prices (equations 30-32).- 2.4 The Stochastic Equations for the Monetary Sector (equations 35-37).- 3 The Model Performance.- 4 Impact and Dynamic Multipliers.- 4.1 Simulation Assumptions.- 4.2 Simulation Results.- Appendix A The Hong Kong Model 1990 Version.- B Simulation Results for Selected Variables.- C Data for Hong Kong Model.- 8 The Effectiveness of Monetary and Fiscal Policies in Thailand.- 1 Introduction.- 2 Model Structure and Data Base.- 2.1 Real Sector.- 2.2 Financial Sector.- 3 Model Evaluation.- 4 Model Simulation Experiment.- 5 Conclusions.- Appendix List of Variables and Notations.- 9 Treasury Macroeconomic (TRYM) Model of the Australian Economy.- 1 Introduction.- 2 The Structure of the TRYM Model.- 3 Sectoral Overview.- 4 Overview of the TRYM Model Properties.- 5 Model Simulation of a Productivity Shock.- 6 Conclusion.- Appendix A Equations of TRYM Model.- B List of Mnemonics.- 10 FOCUS Model of the Canadian Economy.- 1 Introduction.- 2 Overview of FOCUS Model.- 2.1 IS Curve, LM Curve and the External Balance (BP) Curve.- 2.2 The Labour Market and Aggregate Supply.- 2.3 Price Determination; Equating Aggregate Demand and Supply.- 2.4 Special Features of FOCUS: Inflation Expectation and Policy Levers and Switches.- 3 Glossary.- 4 The FOCUS Model Equations.- 4.1 Auto and Consumer Spending.- 4.2 Public Finance/Government Expenditure.- 4.3 Investment and Inventories.- 4.4 Housing and Residential Investment.- 4.5 Foreign Trade.- 4.6 Capital Flows and the Balance of Payments.- 4.7 GNP/GDP and Production — Potential GDP.- 4.8 National Income.- 4.9 Corporation Profits.- 4.10 Taxes and Transfers.- 4.11 Personal Income.- 4.12 Government Surplus or Deficit.- 4.13 Gross Saving.- 4.14 Labor Force and Employment.- 4.15 Wages and Prices.- 4.16 Financial: Money Stock and Related Assets.- 4.17 Internal Rates and Price Expectations.- 11 Malaysian Model II.- 1 Introduction.- 2 Overview of the Malaysian Economy.- 3 Specification of the Model.- 3.1 Malaysia Model II.- 3.2 List of Variables.- 4 Model Performance.- 5 Policy Simulations.- 6 Conclusions.- Appendix Data.- 12 A Structural Model of the Singapore for Asian Link.- 1 Introduction.- 2 Overview of the Singaporean Economy.- 3 Model Specification.- 4 Simulation Experiments.- 5 Conclusions.- Appendix A Data.- B Sources of Variables.- 13 An Annual Philippine Macroeconometric Model for Policy Analysis.- 1 Introduction.- 2 Structure of MRM-93.- 3 Validation and Sensitivity Analysis of MRM-93.- 4 Concluding Remarks.- Appendix A List of Equations.- B Data Base.- 14 A Linked International Model for the Pacific-Basin Economy.- 1 Introduction.- 2 Structure of the Linked Model.- 3 Simulation with the Linked System.- 4 Conclusions.- Appendix A List of Variables of the Linked International Model.- B Data Source.- C The Structure of the Linked International Model.- 15 The Growth of the Korean Economy and the Foreign Capital.- 1 Introduction.- 2 A Comparison of Productivity.- 3 Macroeconometric Model.- 3.1 Korean Model 1970–1987.- 3.2 Exogenous Variables.- 3.3 Result of Final Test.- 4 Simulation.- 5 Conclusions.- Appendix Data for Korea 1963–1987.- Author Index.