Browsing by Subject "Asia"

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  • Fungáčová, Zuzana; Weill, Laurent (2014)
    BOFIT Policy Brief 8/2014
    Financial inclusion contributes to economic growth and poverty reduction. We examine financial inclusion levels in twelve Asian countries. To do so, we utilize data from the World Bank Global Findex database for 2011. We find large cross-country differences for the three main indicators of financial inclusion (ownership of a bank account, savings on a bank account, use of bank credit) and observe that ownership of a bank account is more common in high-income countries. However, the pattern of financial inclusion in terms of saving on a bank account or using formal credit differs across countries and is not related to per capita income. There are nonetheless major similarities in the motives for financial exclusion and in the alternative sources of borrowing in Asian countries. Voluntary financial exclusion is more prominent than involuntary exclusion, the main reason being lack of money. We also find that borrowing from family or friends is the most common way of obtaining credit and that relying on alternative private lenders is quite limited.
  • Fromlet, Hubert (2014)
    BOFIT Policy Brief 15/2014
    During and after the Central Committee’s Third Plenum in November 2013, China announced far-reaching reforms in the spheres of marketization and economic deregulation that included financial markets. While the speed of the rollout of China’s planned reforms is still unknown, officials repeatedly reference the great opportunities for guiding China onto a healthier, more sustainable social and economic track. The risks of such ambitious marketization and deregulation plans need to be considered in the context of speed and sequencing of reforms of the financial sector. We currently lack the skills for overcoming the famously low predictability of financial crises. The areas for skill improvement largely relate to market psychology (behavioral finance) and the understanding of history and macrofinancial aggregates. The much-undervalued discipline of behavioral finance has started to come into its own over the past 10 to 15 years, including the awarding of the 2013 Nobel Prize Robert in Economics to Robert Shiller for his efforts at understanding the psychology of financial markets. This year’s Nobel Prize winner, Jean Tirole, also considers behavioral aspects in his work. Sweden has had two serious banking crises in the past 30 years. The first – and most serious – crisis occurred in the early 1990s, while a smaller crisis took place at the end of the last decade. Both were foreseeable. The first crisis emerged as Swedish banking entered uncharted deregulation waters, a situation Chinese reformers will themselves inevitably confront. Swedish research findings with respect to sequencing, speed of reforms and behavioral finance apply nicely to the Chinese discussion. The italicized discussion focuses on what the Swedish deregulation experience means for Chinese policy choices, but most of these observations are generally relevant for policymakers in emerging markets in Asia and elsewhere. Publication keywords: financial deregulation, Asia, Sweden
  • Chen, Hongyi; Funke, Michael; Tsang, Andrew (2016)
    BOFIT Discussion Papers 11/2016
    ​Persistent producer price deflation in China and other Asian economies has become a genuine concern for policymakers. In June 2016, China’s producer prices were down 12.7 percent from their peak in 2011, following a 52-month stretch of consecutive negative producer price readings (March 2012 to June 2016). Given problems with overcapacity and heavy corporate debt burdens, the incessant decline in producer prices has eroded corporate profitability, dampened fixed in-vestment and depressed growth overall. This paper analyzes the determinants of producer price declines across eleven Asian economies, finding that the recent synchronous and protracted pro-ducer price deflation has been driven by weak production growth, low commodity prices, spill-over effects from China, and, to a lesser extent, exchange rate pass-through. With China at the heart of the region’s producer price deflation challenge, we consider the structural adjustments needed in China to cope with the decline and head off deflationary threats.