Modify your search
Impact of Exchange Market Forces on Pak-Rupee Exchange Rates during Globalization Period: An Empirical Analysis
Syed Adnan Haider Ali Shah Bukhari, Muhammad Shahbaz Akmal, Mohammad Sabihuddin Butt
Published:Jan - June 2006
This paper analyzes the impact of exchange market forces on Pak-Rupee/US dollar exchange rates during the 1965-1971 globalization period. The main findings are that a) the behavior of Pakistan’s fundamentals relative to those of the USA help to explain exchange market forces against the Pak-Rupee; b) during the run up to devaluation in the globalization period the monetary authorities in Pakistan were acting to reduce domestic credit; but that c) additional pressure was brought against the Pak-Rupee from speculative sources. These findings relate to current thinking on the choice of the exchange rate regime as even well behaved fundamentals may not be sufficient to sustain a currency on its peg.
KEYWORDS:
Exchange market forces, pegged exchange rates, realignment expectations.
JEL:
C53.
Book Reviews: In Defense of Globalization by Bhagwati, Jagdish
Nina Gera
Published:Jan - June 2006
Bhagwati, Jagdish, In Defense of Globalization, Oxford University Press, New York, 2005, pp 308, Price US $ 15.95.
The style is lucid in this provocative book and the author captures the reader’s attention throughout. Yet anyone anywhere including Jagdish Bhagwati who claims that extreme inequality is benign and good for the poor simply cannot by any means be taken too seriously, ‘evidence’ and analysis notwithstanding. Bhagwati, a Columbia University economics professor and author of many books on trade, has a brilliant intellect no doubt, but his thinking and ideas to my mind seem somewhat misdirected.
KEYWORDS:
Globalization, book review, Bhagwati.
JEL:
N/A.
Impact of Ownership and Concentration of Land on Schooling
Haroon Jamal and Amir Jahan Khan
Published:July - Dec 2005
The study argues for land reform in Pakistan by demonstrating an inverse relationship between students’ enrollment and land concentration and landlessness for 50 districts of the Punjab and Sindh provinces. With the help of enrollment data from the Population Census, a composite measure is constructed and linked with the inequality in ownership of land and landlessness. While the effect of the development level of districts on schooling is as expected positive and substantial, both the Gini coefficient for land ownership and coefficient of landlessness are negative and statistically significant.
KEYWORDS:
Pakistan, schooling, land reform, Gini Coefficient.
JEL:
N/A.
Industrial Clusters in Developing Countries: A Survey of the Literature
Theresa Thompson Chaudhry
Published:July - Dec 2005
This paper provides a survey of the theoretical and empirical literature relating to industrial clusters. These clusters are groups of firms that are specialized by sector, located in close geographic proximity and consist of mostly small and medium sized enterprises. The benefits to firms from clustering are sometimes referred to as active and passive collective efficiency. Passive collective efficiency refers to benefits accruing to a firm by virtue of being in a cluster, such as access to markets and skilled labor, technological spillovers, flexible specialization, and reduced transaction costs. Active collective efficiency, on the other hand, stems from purposeful cooperation between clustered firms to undertake a large-scale project to upgrade production, such as entering into product marketing.
KEYWORDS:
Industrial clusters, SMEs, transaction costs, passive, active, collective efficiency.
JEL:
N/A.
The Death of CAPM: A Critical Review
Nawazish Mirza and Ghalia Shabbir
Published:July - Dec 2005
Most behavioral sciences based on rationality have simplistic assumptions; and the same is true about consumption or investment decisions. The aim of such studies is to maximize either utility or wealth. The entire ‘financial economics’ theory revolves around an investor who wants to maximize his return at some given level of risk. To determine the optimal return at a given level of risk or an optimal risk for a given level of return has been widely discussed in the financial literature consequently raising the issue of asset pricing in financial markets.
KEYWORDS:
Asset pricing, CAPM, financial literature, review.
JEL:
N/A.
A Comparison of Domestic Vs Foreign Banks Using Stochastic Frontier Approach
Adiqa Kiani
Published:July - Dec 2005
In a globalized world in which the structures of the financial service industries are changing rapidly and becoming more and more competitive, the cost efficiency of financial institutions along with better quality of service have assumed crucial significance for their long-term sustainability. Hence, the nature of efficiency of financial institutions will determine the prospects of their success in meeting the challenges of a globalized world.
The commercial banks in Pakistan are also facing the challenges of increased competition from foreign commercial banks while their operations over the years have also been called into question. However, the literature, which deals with questions of cost efficiency of commercial banks in Pakistan in a professional manner is scant. The information on relative technical efficiency of commercial banks, if available, can be helpful in designing policy for this important sector.
KEYWORDS:
Financial institutions, Pakistan, commercial banks, sustainability, banking sector.
JEL:
N/A.
Impact of Macroeconomic Announcements on the Stock Prices: An Empirical Study on the Turkish Financial Services Sector
Mete Feridun
Published:July - Dec 2005
The purpose of this study is to test the efficiency of the Turkish Markets in terms of the monthly inflation announcement effect. The study examines the reaction of the financial services sector to monthly inflation announcements, particularly, in case of unexpectedly low or high levels of inflation. Strong evidence emerges that the Turkish financial services sector does not react significantly to the announcements that are in line with the expectations. In other words, the cumulative abnormal returns around such inflation announcements are not significantly different from 0. The results of the robustness tests for no news, indicate that the t-statistics calculated by means of the Moving Average Approach are insignificant for the sector, which is in line with the results of the original approach. The results of the two robustness tests are found to be supporting the original findings of the adaptive approach.
KEYWORDS:
Abnormal Returns (ARs), Cumulative Abnormal Returns (CARs), effects of macroeconomic announcements.
JEL:
N/A.
The Exchange Rates and Monetary Dynamics in Pakistan: An Autoregressive Distributed Lag (ARDL) Approach
Muhammad Arshad Khan and Muhammad Zabir Sajjid
Published:July - Dec 2005
In this paper we investigate both the long and short-run relationship between real money balances, real income, inflation rate, foreign interest rate and real effective exchange rate with reference to Pakistan over the period 1982Q2-2002Q4 using ARDL approach which is a newly developed econometric technique. The estimated results indicate that in the long-run real income, inflation rate, foreign interest rate and real effective exchange rate have a significant impact on real money balances in Pakistan. The dynamics of real money demand show that the effects of rate of inflation, foreign interest rate and the real effective exchange rate are much smaller in the short run than long run. The results also reveal that the demand for real money balances in Pakistan is stable, despite the economic reforms pursued by the government since the late 1980s.
KEYWORDS:
Pakistan, ARDL, exchange rates, monetary policy.
JEL:
N/A.
Comparative Advantage and Competitiveness of Wheat Crop in Pakistan
Sofia Anwar, Zakir Hussain, M. Siddique Javed
Published:July - Dec 2005
This study was conducted to analyze the comparative advantage and competitiveness of wheat crop and its implications for resource allocation towards competing crops. The extent of policy distortion and agricultural protection was also determined by the study. The data were collected from APCom on cost of production of wheat crop over the three year period (2001-2003). Two main provinces contributing towards wheat production i.e. Punjab and Sindh were selected as the sample. This data were then averaged to obtain a national scenario. The crop budgets were prepared initially in financial terms and later on economic prices were utilized to evaluate the comparative advantage and competitiveness of the wheat crop. The Policy Analysis Matrix (PAM) was selected as the analytical framework. The policy distortions were measured through Nominal Protection Coefficient (NPC) and Effective Protection Coefficient (EPC). The Domestic Resource Cost ratio (DRC) was selected as a measuring tool for comparative advantage. Keeping in view the importance of wheat in the economy, the analysis was conducted in two price regimes i.e. import and export parity prices. The analysis results showed that at import parity price Pakistan has a comparative advantage in the production of wheat only as an import substitution crop. At export parity price, Pakistan is not competitive in the world wheat market and has no comparative advantage in wheat production.
KEYWORDS:
PAM, Pakistan, NPC, DRC, EPC, wheat crop.
JEL:
N/A.
Corruption and Trade Liberalization: Has the World Bank Anti-Corruption Initiative Worked?
Azam Chaudhry
Published:July - Dec 2005
In September 1997, the World Bank formally began its anti-corruption initiatives by adopting a series of official guidelines and policy statements to aid in anti-corruption strategies. One of the main areas of focus is international trade. According to World Bank (1997), the areas in which corruption is most often found is in, “customs and tax departments, social security agencies, land titling and environment agencies administering regulations and issuing licenses, public works departments and other agencies involved in significant public procurement, police and judiciary, and privatization agencies.” In particular, trade policies can be susceptible to corruption, even though many countries have successfully managed trade policies to promote industrialization. This susceptibility of trade policies to corruption is because they involve allocations made by the authorities on discretionary rather than efficiency bases. Examples of this are the discretionary actions of customs officials, the administrative actions of the authorities in the allocation of import licenses and foreign exchange, and bribery involved in maintaining high rates of tariffs.
KEYWORDS:
World Bank, anti-corruption strategies, international trade.
JEL:
N/A.