No abstract

Policy prescriptions have generally assumed that exchange rate depreciation would stimulate exports and curtail imports, while exchange rate appreciation would be detrimental to exports and encourage imports. This prediction has, however, often neglected to consider the existence of the import content of exports, as well as the dynamic effects of productivity improvements. Our paper seeks to show empirically, the significance of these two factors in affecting the competitiveness of Singapore's exports. Specifically, the paper shows that in the presence of high import content, exports are not adversely affected by currency appreciation because the lower import prices due to appreciation reduce the cost of export production. In the case of Singapore, this cushioning effect outweighs that of the effect of productivity gains on export competitiveness. The service exports, however, with a very low import content tend to suffer from currency appreciation.

This paper develops a structural VAR model to measure how a shock to one country affects other countries’ GDP. It uses trade linkages to estimate the multiplier effects as a shock is transmitted through output fluctuations and introduces a new specification strategy that reduces the number of unknowns and allows cross‐country relationships to vary over time. This model is used to examine the impact of shocks to 11 Asian countries, the US, and the rest of the OECD. Impulse‐response matrices suggest that these multiplier effects are large and can transmit shocks in very different patterns than predicted from a bilateral‐trade matrix.

The growing affluence of the East and Southeast Asian economies has come about through a substantial increase in their economic links with the rest of the world, the OECD economies in particular. Econometric studies that try to quantify these links face a severe shortage of high-frequency time series data for China and the group of ASEAN4 (Indonesia, Malaysia, Philippines and Thailand). In this paper we provide quarterly real GDP estimates for these countries derived by applying the Chow-Lin related series technique to annual real GDP series. The quality of the disaggregated series is evaluated through a number of indirect methods. Some potential problems of using readily available univariate disaggregation techniques are also highlighted. Copyright © 2004 John Wiley & Sons, Ltd.

Most commonly used measures of housing affordability are essentially short-run indicators that compare current income with house prices or housing costs. Despite the emphasis in the literature on the importance of long-term affordability, researchers have not developed measures of lifetime income because of data constraints. Many developed countries publish annually household income by age of household heads. Using these data for Singapore, the paper presents a methodology to compute lifetime income from predicted annual household earnings over the working life for each birth cohort in the dataset. The lifetime income of Singapore households by three income quantiles sheds new light on widening income gaps. The affordability index, defined as the ratio of lifetime income to house price, reveals informative trends and cycles in housing affordability in both the public and the private sectors. The paper argues that residential property price escalations need to be avoided. an impressive record of homeownership under the public housing programme. 1 Facilitated by various government policies such as the Approved Housing Scheme introduced in 1968, subsidised new public flats supplied by the Housing and Development Board (HDB) and subsidised housing loans, 2 private ownership of public housing reached 79 per cent of the total resident population of Singapore in 2007 (Yearbook of Statistics Singapore, 2008).