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This paper examines the role of local currency bond markets (LCBMs) and foreign investor participation in these markets in capital flow volatility in emerging Asian economies over the period 1999 to 2020. Using a panel analysis and impulse response functions generated from a panel structural vector autoregression, we show that greater development of LCBMs across 10 Asian emerging economies in terms of capitalization helps to mitigate against the capital flow volatility, while foreign investor participation has the opposite effect, particularly for less developed LCBMs. Our findings have policy implications from a financial stability perspective, whereby continued efforts to enhance LCBMs while reducing reliance on foreign investors should be encouraged. Strengthening the local investor base and mobilizing domestic resources through LCBMs ought to be a priority for raising long-term capital that will enable the financing of sustainable investment and development. Our findings also suggest that greater efforts are needed to enhance foreign exchange hedging arrangements for foreign investors in LCBMs, particularly in times of heightened financial stress. [ABSTRACT FROM AUTHOR]

The exchange rate is a crucial macro indicator for any open economy, whereby any change in the rate would influence, to a certain extent, various socioeconomic facets. One of the significant impacts is revealed in the pass-through of exchange rate variations to price inflation, also known as the exchange rate pass-through (ERPT). This paper explores the effect of ERPT on domestic inflation in Vietnam by comparing with other Asian economies. Specifically, pass-through mechanisms are examined for every single price as well as a distribution chain from import price index (IMP), producer price index (PPI) to consumer price index (CPI). The empirical results show that exchange rate shocks positively influence the price changes in Vietnam as well as in other Asian countries. According to Cholesky decomposition, the exchange rate plays a limited role in regulating CPI movements. Besides, world commodity prices are found to have a significant impact on domestic inflation across the sample-countries. Our findings reveal profound implications for monetary policy management and price stability. [ABSTRACT FROM AUTHOR]

This paper examines the national saving behaviour in the process of economic growth through a comparative analysis of countries in developing Asia from a historical perspective. Developing Asia provides an ideal laboratory for the study with considerable differences in the saving behaviour among countries and over time within individual countries, notwithstanding the 'model saver' image of the region that is based mainly on the experience of high-performing East Asian economies. The empirical analysis distinguishes between private and government saving rates, with specific emphasis on the former. The results of the empirical analysis are consistent with the view of a 'virtuous circle' between growth and saving, with growth initiating the saving transition. No evidence to suggest that a prior phase of promoting saving through specific policy initiatives is needed to initiate the process of growth and structural transformation. The private saving rate is also associated positively with export orientation of the economy, and net foreign capital inflows and negatively with the young dependency ratio of the population and domestic credit availability. [ABSTRACT FROM AUTHOR]

This paper studies 10 Asian economies' experiences during two episodes of financial crises in 1997–08 and 2007–09. Our analysis of five crisis‐hit Asian countries shows that overinvestment via credit expansion and foreign financing has an adverse effect on banking sectors while income inequality contributes significantly to financial distress. With five no‐crisis emerging markets included in our Asia analysis, we find that export‐oriented growth backed up by domestic savings is financially less risky than investment‐led growth facilitated by capital inflows. Since such different strategies of output growth to deal with falling demand are related ultimately to the same factor–rising inequality, this distributional problem must be overcome effectively to enhance financial stability and ensure growth sustainability. [ABSTRACT FROM AUTHOR]

This paper examines the impact of macroprudential policies on the nexus between economic uncertainty and bank risk in emerging Asian economies. We construct our index of economic uncertainty by applying the Generalized Autoregressive Conditional Heteroskedasticity (GARCH)-in-mean model to a series of important macroeconomic variables, and borrow macroprudential policy indices from Cerutti et al. (2017) and Alam et al. (2019). Using bank-level panel data from approximately 600 commercial banks in 11 emerging Asian economies during the period 2000–2016, we find consistent evidence that bank risk increases with economic uncertainty, while macroprudential measures play an ameliorative role in uncertainty-induced bank risk. Our baseline findings are largely driven by macroprudential measures that aim to dampen the credit cycle more than those that target increasing the resilience of the banking sector. Our further analyses of the heterogeneous impacts of macroprudential measures by specific type on the risk of banks show that liquidity-based instruments, reserve requirements and currency instruments play a more conspicuous role in the economic uncertainty‒bank risk nexus than capital-based and asset-side macroprudential instruments. [ABSTRACT FROM AUTHOR]

Purpose: This study attempts to explain the impact of Fintech on the Asian economies through two main indicators, inflation and unemployment over the period 2011-2014-2017. Design/methodology/approach: This study uses panel data regression models to explain the relationship between Fintech, inflation as an indicator of currency circulation and unemployment since Fintech has disrupted the labor market. Findings: Empirical results show a consistently strong and positive relationship between the development of financial technologies and the reduction of inflation and unemployment unless these technologies are actively used. Digital finance has become a new driver of economic development. Therefore, governors should not only improve their economies but also expand their information and communication technologies to develop their digital infrastructure, especially for businesses. Originality/value: The present study contributes to the existing literature on the impact of disruptive digital innovation on the socioeconomic development of emerging countries. The empirical evidence highlights the importance of distinguishing between active and passive uses of Fintech in order to anticipate its economic impact. [ABSTRACT FROM AUTHOR]