Policymakers in developing countries have increasingly pinned their hopes on bilateral investment treaties (BITs) in order to improve their chances in the worldwide competition for foreign direct investment (FDI). However, the effectiveness of BITs in inducing higher FDI inflows is still open to debate. It is in several ways that we attempt to clarify the inconclusive empirical findings of earl...

In light of the recent financial crises in the emerging markets, the coming-into-force of the financial services agreement under the GATS has been considered a success. While the agreement provides for little new liberalization but rather formalizes the status quo, it was feared that governments could even backtrack on previous commitments in the belief that more open markets could increase the...

This paper fist examines three set of bivariate cointegrations between any two of current accounts, stock markets, and currency exchange markets in ten Asian countries. Furthermore, we examined the effect of country characters on this bivariate cointegration. Our findings suggest that for three sets of cointegration test, each sample country at least exists one cointegration. India consistently...

The existing disappointment with the performance of transition economies is unjustified as far as the contraction of their industries, real wages and capital formation in the 1990s is concerned. The initial under-performance of transition economies that had inherited more severe shortages, as in former Soviet Republics, is to be expected also. We establish these results by estimating what align...

Since 1991, the city of Delhi in India has become a focal point of economic liberalization. Economic liberalization has been accompanied by local government efforts to attract both foreign and domestic investment, particularly in the service sectors of the economy. The attraction of investment has been achieved by spatial reconfiguration, pitting the interest of global and domestic capital agai...

Improvements in economic efficiency and productivity are the most important sources for economic growth, however, have yet to occur in Russia. The Soviet Union left an institutional vacuum and large economic distortions behind, which set the stage for an established elite to systematically exploit factors of production for their personal benefit lacking the incentives to restructure. This paper...

Working papers in this series are preliminary and are circulated to stimulate discussion and critical comment. These papers are not subject to CBO's formal review and editing processes. The analysis and conclusions expressed in them are those of the authors and should not be interpreted as those of the Congressional Budget Office. References in publications should be cleared with the authors. P...

Are countries with unregulated capital flows more vulnerable to currency crises? Efforts to answer this question properly must control for self-selection bias, because countries with liberalized capital accounts may also have sounder economic policies and institutions that make them less likely to experience crises. We employ a matching and propensityscore methodology to address this issue in a...

This paper explores trade policy and investment linkages in the GTAP Model. This is done under alternative steady-state closure rules linking trade to consumption, production, and investment, and emphasizing the general equilibrium nature of capital accumulation mechanisms. When policy shocks are capital friendly, induced investment may be greater than suggested by current savings rates. As a r...

This paper investigates the current situation and main reasons for the massive circulation of China’s national currency, the renminbi (RMB), in China’s neighboring economies. It indicates that the expansive use of RMB in Asia is the beginning of the process of RMB internationalization. This process is being driven by a strong Chinese economy and increased investors’ confidence in RMB. Internati...