The Developing Economies
Volume 38, Number 2 (June 2000)
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CONTENTS
Output Growth and Variability of Export and Import Growth: International Evidence from Granger Causality Tests (67KB) / Panos Afxentiou and Apostolos Serletis
India's Apparel Exports: The Challenge of Global Markets (74KB) / K. V. Ramaswamy and Gary Gereffi
Ages as a Factor Determining Income Inequality in Sri Lanka (143KB) / Hettige Don Karunaratne
Book Reviews
Taiwanese Firms in Southeast Asia: Networking across Boarders edited by Tain-Jy Chen (27KB) / Yukihito Sato
Abstract
Panos
Afxentiou
and
Apostolos
Serletis,"Output
Growth
and
Variability
of
Export
and
Import
Growth:
International
Evidence
from
Granger
Causality
Tests,"
pp.
141-63.
A
sample
of
fifty
developing
countries
was
investigated
from
1970
to
1993
in
terms
of
causality
from
export
and
import
growth
as
well
as
from
anticipated
and
unanticipated
export
and
import
growth
volatility
to
per
capita
GNP
growth.
No
credible
evidence
of
causality
was
detected
by
the
various
tests.
This
lack
of
causal
evidence
does
not
imply
that
international
trade
is
not
a
contributory
development
force,
but
inferentially
suggests
that
growth
should
be
sought
mainly
within
the
domestic
dynamic,
with
international
trade
extending
a
helpful
hand
to
the
development
process
of
the
highly
heterogeneous
developing
countries.
Sun
Lixing,
"Time-Varying
Estimates
on
the
Openness
of
Capital
Accounts
in
East
Asia
and
Mexico,"
pp.
164-85.
In
this
paper
I
estimate
the
model
of
interest
determination
to
obtain
the
time-varying
estimates
on
the
openness
of
capital
accounts
in
the
Republic
of
Korea,
Indonesia,
Thailand,
and
Mexico.
Instead
of
adopting
a
perfect
foresight
method
and
using
the
actual
depreciation
rate,
I
present
an
alternative
empirical
measurement
of
unobserved
expected
exchange
rate
by
estimating
a
univariate
SARIMA
model.
This
study
shows
the
significant
steps
since
the
1980s
in
the
liberalization
of
capital
accounts
of
the
above
countries,
and
also
points
out
the
regional
differences
in
the
approaches
to
liberalization
between
East
Asia
and
Mexico.
My
empirical
estimates
of
capital
account
openness
strongly
support
the
view
that
maintaining
an
domestic
monetary
target
such
as
the
price
level
becomes
more
and
more
difficult
with
a
fixed
exchange
rate,
and
thus
highlight
that
a
sterilized
intervention
policy
is
necessary
in
most
developing
countries
in
order
to
keep
independent
domestic
monetary
targets.
K.
V.
Ramaswamy
and
Gary
Gereffi,
"India's
Apparel
Exports:
The
Challenge
of
Global
Markets,"
pp.
186-210.
In
order
to
gain
a
better
understanding
of
the
problems
facing
India's
apparel
exports,
this
paper
focuses
on
two
themes.
First
it
looks
at
the
globalization
of
apparel
production
and
the
changing
competitive
conditions
in
the
global
apparel
market.
The
second
theme
is
the
characteristics
of
India's
apparel
exports,
the
production
structure
that
supports
the
export
profile,
and
the
effects
of
policy
regulation.
In
the
world
apparel
market
retailers
and
brand-name
marketers
exercise
the
main
leverage.
They
outsource
apparel
to
meet
customer
demand
and
depend
on
package
suppliers.
India
is
at
present
a
niche
player
in
the
low-value
segment
of
the
market
for
seasonal
and
fashion
garments
made
of
cotton
fabric.
India
needs
to
restructure
its
production
base
to
meet
the
challenge
of
changing
global
markets.
Government
policy
should
remove
the
impediments
hindering
the
entry
of
large
domestic
firms
and
foreign
investment
into
the
apparel
industry.
Hettige
Don
Karunaratne,
"Ages
as
a
Factor
Determining
Income
Inequality
in
Sri
Lanka,"
pp.
211-42.
Using
decomposable
inequality
measurements
and
shift-share
analysis,
this
paper
empirically
examines
the
importance
of
age
as
a
factor
determining
income
inequality
in
Sri
Lanka
during
the
1963-87
period.
Although
total
income
inequality
behaved
in
a
"V"
shape,
the
contribution
of
the
age
effect
to
this
inequality
followed
a
modest
inverted-U
shape.
The
importance
of
age
is
significant
in
urban
areas
when
compared
with
rural
areas.
In
explaining
within-age-group
inequality,
sector
is
important,
while
region
and
gender
are
negligible
factors.
Since
the
income-inequality
level
is
high
among
the
over
thirty-five
age
groups,
increasing
their
share
in
the
total
income
will
lead
to
an
increase
in
total
income
inequality.
In
particular,
the
growing
share
of
elderly
people
has
a
strong
impact
on
increasing
income
inequality.
To
reduce
income
inequality,
two
possible
target
areas
are
over
fifty-five
age
females
and
sectoral
differences
of
the
mean
income
of
all
the
groups
aged
above
thirty-five.