FRONT COVER -- THE EVOLVING ROLE OF ASIA IN GLOBAL FINANCE -- COPYRIGHT PAGE -- ABOUT THE SERIES: FRONTIERS OF ECONOMICS AND GLOBALIZATION -- ABOUT THE EDITORS -- LIST OF CONTRIBUTORS -- CONTENTS -- INTRODUCTION: THE EVOLVING ROLE OF ASIA IN GLOBAL FINANCE -- PART I: REAL AND FINANCIAL INTERACTIONS -- CHAPTER 1 BUSINESS CYCLES, CONSUMPTION, AND RISK SHARING: HOW DIFFERENT IS CHINA? -- 1 Introduction -- 2 Does the business cycle framework work for China? -- 3 Informal examination of China's provincial data -- 4 A test of the perfect risk-sharing hypothesis -- 5 Conclusion -- Statistical Appendix -- References -- CHAPTER 2 LINKAGES BETWEEN STOCK MARKET FLUCTUATIONS AND BUSINESS CYCLES IN ASIA -- 1 Introduction -- 2 Preliminary analysis -- 3 Short-run cyclical linkages -- 4 Short-run linkages between cyclical phases -- 5 Cyclical synchronization and extreme phases -- 6 Conclusion -- Acknowledgments -- Appendix A. The CF filter (Christiano and Fitzgerald, 2003) -- Appendix B. Perfect and multivariate synchronization (Harding and Pagan, 2006) -- Appendix C. Detecting extreme cyclical phases (Candelon and Metiu, 2009) -- References -- CHAPTER 3 STOCK MARKET LINKAGE BETWEEN ASIA AND THE UNITED STATES IN TWO CRISES: SMOOTH-TRANSITION CORRELATION VAR-GARCH APPROACH -- 1 Introduction -- 2 Review on the financial linkage of Asian stock markets with the United States -- 3 Econometric approach -- 4 Empirical results for the Asian financial crisis and subprime loan crisis -- 5 Robustness check -- 6 Conclusions -- Acknowledgments -- References -- CHAPTER 4 THE LINK BETWEEN FX SWAPS AND CURRENCY STRENGTH DURING THE CREDIT CRISIS OF 2007-2008 -- 1 Introduction -- 2 Covered interest parity in financial turmoil -- 3 Effects of counterparty risks on deviations from covered interest parity -- 4 Deviations from covered interest parity and currency strength.

5 Conclusion -- Acknowledgments -- References -- PART II: REGIONAL MONETARY COOPERATION -- CHAPTER 5 THE IMPLICATIONS OF RENMINBI BASKET MANAGEMENT FOR ASIAN CURRENCY STABILITY -- 1 Introduction -- 2 The renminbi and the dollar since July 2005 -- 3 The evolving RMB management since July 2005 -- 4 Implications for intra-Asian exchange rate stability -- 5 Conclusions -- Acknowledgment -- References -- CHAPTER 6 ON THE CHOICE OF EXCHANGE RATE REGIMES FOR EAST ASIAN COUNTRIES -- 1 Introduction -- 2 Considerations regarding the choice of exchange rate regimes -- 3 Trade considerations -- 4 International assets and liabilities -- 5 From the East Asia dollar standard to the East Asian basket standard -- 6 Conclusion -- Acknowledgments -- Annex 1. Estimated basket weights of Thai baht, 1999-2008 -- References -- CHAPTER 7 STABILITY OF EAST ASIAN CURRENCIES DURING THE GLOBAL FINANCIAL CRISIS -- 1 Introduction -- 2 What is an appropriate currency regime for East Asia? -- 3 Exchange rate fluctuations under the global financial crisis -- 4 The NEERs of East Asian currencies -- 5 The relationship among effective exchange rates, the AMU, and the AMU deviation indicators -- 6 Coordinated exchange rate policies with the AMU and AMU deviation indicators -- 7 Conclusion -- Acknowledgments -- Appendix. The AMU and AMU deviation indicators -- References -- CHAPTER 8 ON EMERGING ASIAN EQUILIBRIUM EXCHANGE RATES -- 1 Introduction -- 2 Estimation of currency misalignments -- 3 Convergence to equilibrium: how long are the disequilibria? -- 4 Conclusion -- Acknowledgment -- Appendix -- References -- PART III: DECOUPLING -- CHAPTER 9 GLOBAL CONTAGION AND THE DECOUPLING DEBATE -- 1 Introduction -- 2 A brief history of the decoupling debates -- 3 An interpretation of the swings in opinion -- 4 Concepts of decoupling.

5 Analysis of the instability of growth and financial market correlations -- 6 Did the BRICs insulate their economies successfully from the great recession? -- 7 Concluding remarks -- References -- CHAPTER 10 THE DECOUPLING OF ASIA-PACIFIC? -- 1 Introduction -- 2 Existing evidence -- 3 Empirical evidence -- 4 Conclusion -- Acknowledgments -- References -- CHAPTER 11 HAS EMERGING ASIA DECOUPLED? AN ANALYSIS OF PRODUCTION AND TRADE LINKAGES USING THE ASIAN INTERNATIONAL INPUT-OUTPUT TABLE -- 1 Introduction -- 2 Brief review of the literature -- 3 Emerging Asia's external dependence based on trade data -- 4 Methodology -- 5 Analysis using the AIO tables -- 6 Conclusions -- Acknowledgments -- Appendix A. The updating procedure -- Appendix B. Classification of goods by broad economic categories (BEC) -- Appendix C. Sensitivity analysis - results from the updated 1995 AIO table -- Appendix D. The derivation and interpretation of the main indicators used in the analysis of backward linkages (Leontieff coefficients) -- Appendix E. Detailed results from the impact of final demand on value-added exercise -- References -- CHAPTER 12 THE AUSTRALIA-ASIA BUSINESS CYCLE EVOLUTION -- 1 Introduction -- 2 Data and methodology -- 3 Empirical results -- 4 Conclusions -- Acknowledgments -- Appendix -- References -- PART IV: DOMESTIC FINANCE AND CAPITAL FLOWS -- CHAPTER 13 WHAT ARE THE SOURCES OF FINANCING FOR CHINESE FIRMS? -- 1 Introduction -- 2 Data -- 3 Do state-owned firms have easier access to external financing? -- 4 How do private firms finance themselves? -- 5 Conclusion -- Acknowledgments -- References -- CHAPTER 14 FOREIGN DIRECT INVESTMENT IN CHINA: PERFORMANCE, CHARACTERISTICS, AND PROSPECTS -- 1 Introduction -- 2 The growth of FDI inflows into China -- 3 Characteristics of FDI inflows into China -- 4 Contributions of FDI to China's economy.

5 Prospects for FDI inflows into China -- 6 Conclusion -- References -- CHAPTER 15 DEVIATIONS FROM COVERED INTEREST PARITY: THE CASE OF CHINA -- 1 Introduction -- 2 Determinants of cover interest differential -- 3 The basic empirical specification and data -- 4 Empirical results -- 5 Concluding remarks -- Acknowledgments -- Appendix -- References -- CHAPTER 16 HONG KONG'S FUTURE AS A SECURITIES MARKET -- 1 Brief overview of Hong Kong market -- 2 Forecasting the role of Hong Kong's public equity market -- 3 Political realities always shape the structure and scope of public equity markets -- 4 The future of the Hong Kong peg -- 5 Future of the renminbi and Hong Kong's role as a major securities market for China -- 6 Impact of technology on Hong Kong as a securities market -- 7 Future of Hong Kong as a global and regional securities market -- 8 A note on language -- 9 Conclusion -- References -- ABOUT THE AUTHORS -- SUBJECT INDEX.