When global crisis struck at a time of great global and regional interdependence, contagion occurs; it can work via capital flows or through spillovers of the returns/yields on financial assets. The analysis in the paper deals with the latter. Focusing on the shocks in the United States and Eurozone bonds market, and using multivariate GARCH models with conditional variance-covariance matrix being positive definite, it is shown that the shock and volatility spillovers in some emerging Asian countries are quite significant. They spread throughout different asset classes, threatening the region's financial stability, and making it more difficult for the policy response to focus on a particular market. Although local bonds volatilities are more determined by their own respective shocks and volatilities, in some markets the direct shock and volatility spillovers remain significant; so does the indirect spillovers within domestic asset markets and across economies. Absent of policy coordination within and across countries. Such undesirable spillovers due to other country's unilateral policy can be damaging. Growing financial nationalism in the midst of a crisis is likely to spark strong reactions from affected countries, potentially creating a conflict situation.

This paper demonstrates that good governance in one country can influence governance improvements in neighboring countries and highlights that regional political and economic cooperation can benefit institutional development across borders. Governance has a spatial dimension due to spillovers and resource flows across juridical boundaries. This paper finds that governance in a given country—manifested most clearly through voice and accountability—exhibits a positive relationship with those in neighboring countries. Feedback mechanisms are traced in that any change in the income level of a country can affect its governance performance and also impact the governance scores of neighboring countries. This phenomenon is observed in the “Arab Spring,” “Me Too,” and “Black Lives Matter” cross-border movements

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Gauging the Cross-Border Spillover Impact of An Inner Mongolia Autonomous Region Investment Program on Mongolia KEY POINTS • This brief uses multiregional input-output tables to estimate the cross-border spillover benefits to Mongolia (as a close neighbor) of a border investment program in the Inner Mongolia Autonomous Region of the People's Republic of China. • The results of the exercise suggest that induced output growth could reach 5% and create 33,000 jobs, 1.4 times higher than without indirect spillover. It also has an impact on employment, which could be 2.6 times higher. • However, these gains could be lower if additional income cannot be fully spent within Mongolia. The country needs to keep developing its own input markets and human capital in order to fully benefit from projects along the border.

This study aims to build an efficient small-scale macroeconomic forecasting tool for Maldives. Due to significant limitations in data availability, empirical economic modeling for the country can be problematic. To address data constraints and circumvent the “curse of dimensionality,” Bayesian vector autoregression estimations are utilized comprising of component-disaggregated domestic sectoral production, price, and tourism variables. Results demonstrate how this methodology is appropriate for economic modeling in Maldives. With the appropriate level of shrinkage, Bayesian vector autoregressions can exploit the information content of the macroeconomic and tourism variables. Augmenting for qualitative assessments, the directional inclination of the forecasts is improved.