This study examines the effects of capital account restrictions on capital flows in nine emerging Asian economies using panel regressions with 75 economies and fixed effects over the period 1995–2007. The results show that effectiveness of capital controls in the nine emerging Asian economies varies by asset type and by direction of flow and may differ from that in the rest of the world. For example, unlike in the rest of the world, the use of controls on capital outflows in emerging Asia actually increases the amount of these outflows. This finding suggests that it may be best for emerging market economies in Asia to liberalize rather than constrain capital outflows if they want to prevent such outflows.

This paper examines the unfolding of the U.S. sub-prime-generated turmoil and its potential spillover effects on Asia's emerging financial systems. The sub-prime mortgage mess has revealed key structural weaknesses in the evolution of modern credit markets. Although emerging Asian financial markets have suffered only limited impact thus far, they remain open to further contagion given underlying weaknesses in the region's financial systems. Rapid financial globalization also poses new challenges as the region's largely unsophisticated banking and financial systems strive to keep up with the evolving financial environment. Policy priorities to foster regional financial stability include enhancing transparency and governance, improving risk management, strengthening regulation and supervision, and deepening and broadening financial systems, especially by developing local currency bond markets.

This paper analyzes the empirical relationships among demographic changes, saving, and current account balances in East Asia. The panel Vector-Auto Regressive (VAR) model shows that an increase in the dependency rate, especially the elderly dependency rate, significantly lowers saving rates and subsequently worsens current account balances. The result implies that the future aging of the population in East Asia would have a significant impact on global capital flows and current account imbalances.

The purpose of this paper is to provide an assessment of the global economic impacts of severe acute respiratory syndrome (SARS) as well as to provide a more comprehensive approach to estimating the global consequences of major disease outbreaks. Our empirical estimates of the economic effects of the SARS epidemic are based on a global model called the G-Cubed (Asia Pacific) model. Most previous studies on the economic effects of epidemics focus on the disease-associated medical costs or forgone incomes resulting from disease-related morbidity and mortality, but the most significant real costs of SARS have been generated by changes in spending behavior by households and firms in affected countries. This study estimates the cost of the SARS outbreak by focusing on the impacts on consumption and investment behavior through changes in the cost and risk of doing business. Through increased economic interdependence, these changes in behavior have wide-ranging general equilibrium consequences for the world economy that can lead to economic losses well in excess of the traditional estimates of the cost of disease.