This book examines how Japan should cope with fiscal challenges, as demands on the budget from an ageing society have necessitated the reigning in of public debt and the revamp of the pension and healthcare systems. It combines insights from academic research with the views of policymakers to distil key issues that need to inform public debate.

The World Trade Organization was established in the 1990s, superseding the GATT and providing a stronger institutional foundation for international trading arrangement among countries. As an international organization it faces a number of challenges, including achieving agreement over trade in services, bringing in new members from the economies in transition and developing countries, making the strengthened dispute settlement mechanism effective, and bringing about an increasingly open multilateral trading system. This volume analyzes the challenges and opportunities confronting the WTO. Several chapters address the WTO's institutional capacity directly, through such issues as the way national policies may influence or constrain the WTO, the difficulties of achieving coherence with the World Bank and the IMF, and the resources available to the WTO's secretariat in relation to the tasks it faces. Other papers in this volume consider more contemporary policy issues facing the WTO, including how to bring services trade into an open multilateral framework, how dispute settlement mechanisms can be improved, and how other concerns, such as labour standards and environmental issues may be addressed. Two papers focus on the WTO's relationship to developing countries and countries in transition, and an introductory chapter provides an overview of the WTO's operation. The text presumes no technical background in economics.

This volume is intended to provide a survey of thought about exchange-rate determination as it emerged in the decade of the 1970s. This survey differs from many, however, in that the field itself is in a state of rapid change. Understanding the changes and the reasons for them is therefore essential if the reader is to have a basis for understanding future advances in knowledge and the further evolution of the system. The survey is also intended to reach non-specialist professional economists whose balance-of-payments theory was learned before the 1970s, as well as to provide graduate students and advanced undergraduates with an up-to-date account of the field. In most respects, the theory of exchange-rate determination is based upon an analytical structure equivalent to that analyzing the determinants of the balance of payments under fixed exchange rates. The difference is that the shifts in excess demand for foreign exchange lead to quantity adjustments under fixed rates and price adjustment under flexible rates. Thus, attention turns first to exchange-rate, or balance-of-payments, determination. Thereafter formal analyses of differences and similarities between the functioning of the alternative systems are considered, reflecting the focus of the profession and the mainstream of research of this period.

A traditionally conservative country in financial matters, India enacted a series of reforms in response to its balance of payments crisis in the early 1990s. But since then only halting progress has been made, raising concerns about India's rising fiscal deficit, inefficiencies in its financial system, and its still relatively closed economy. This book analyzes some of the complex issues currently facing the Indian economy. Looking at India in the international economy, the first section examines reforms of policies toward trade and capital inflows, including issues in exchange rate policy and international business prospects. The second section addresses banking and financial markets, tracking the reforms to date and establishing the need for upgraded technology. The final section compares India's fiscal performance with that of other developing countries, highlighting worrying trends, and presents concrete policy recommendations to advance Indian reforms.

International trade and trade policy have become increasingly important and complex in recent years. In this comprehensive introduction to the key aspects of international trade policy, noted authority Anne O. Krueger explains what has happened and why these issues are so difficult. With evidence-based analysis and an even-handed approach, International Trade: What Everyone Needs to Know lays the foundation to understand what trade does and does not do. Focusing on the importance of trade in both goods and services, Krueger explores the effects of various trade policies step-by-step and demonstrates why economists generally support free trade. Krueger considers the historical experience, highlighting how technological changes and reduction of trade barriers helped transform the world economy. Tariffs, antidumping and countervailing duties, government procurement policies, preferential trading arrangements, trade with developing countries and emerging markets, and the World Trade Organization are examined. Krueger tackles the fundamental questions surrounding trade including: What are the benefits and costs? What are trade deficits and do they matter? Why do some people favor protectionism and barriers to trade? How does trade policy affect workers? Written in question-and-answer format, this non-technical introduction to the policies of international trade provides an indispensable guide to one of the most crucial elements of the global economy.

Uncovering the distinction between the rhetoric and the reality of US trade policy, this study examines growing US protectionism and Washington's aggressive use of bilateral trade tactics. In order to avoid a world trade war, renewed commitment to open multilateral trade is needed.

Over the last twenty-five years, there has been an acceleration in the move from government regulation towards privatization. "Governance, Regulation, and Privatization in the Asia-Pacific Region" is the first thoroughgoing account of the relative success of the different approaches to privatization as undertaken in Korea, China, Australia, and Japan.
In most contexts, privatization is expected to yield greater efficiency and cost effectiveness while avoiding the corruption and bloated budgets of government regulation or monopoly control. But broad-scale privatization, if ill designed, has also yielded its share of difficulties in East Asia. Privatization sometimes has created a vacuum in corporate governance for some of the region's most important industries and in some cases merely reinstated the monopoly-like configurations. The papers presented in this book discuss the experiences of privatization in several industries, including railroad and telecom, corporate governance problems, accounting issues, and challenges for the future in East Asian countries.
The first section is theoretical in nature and proposes boundaries among government protection, market freedom, and shareholder expectations. The second part is constituted by country case studies, beginning with an analysis of both the Korean financial crisis that followed its 1997 law to privatize large, public sector corporations and the new ways Korean corporations finance themselves. Following is an evaluation of China's approach to privatization, with an in-depth look at the financial transitions of companies slated for initial public offering.
Providing provocative examples of the methods of privatization in theAsia-Pacific region specifically, these papers will be of huge import to any economist or policymaker interested in transposing those successes for their own region.

The volume of capital flows between industrial and developing countries has grown dramatically in the past decade and has become a major issue in a world that is increasingly globalized. In this book, Takatoshi Ito and Anne O. Krueger, two leading experts on this topic, have assembled a group of scholars who address different types of capital flows-bank lending, bonds, direct foreign investment-and the implications they hold for economic performance. By concentrating on macroeconomic issues concerning the flow of private capital to and from the East Asian economies during the currency crises of 1997, the commentary aims to help policy makers avoid such crises in the future. The analyses undertaken here deal with a variety of questions, focusing especially on the "economic fundamentals" of the affected economies and on the irrational "herd behavior" of investors. With its particular focus on the Asian financial crises, this work presents a new model in thinking about the role of private capital flows for policy makers everywhere.

The World Trade Organization was established in the 1990s, superseding the GATT and providing a stronger institutional foundation for international trading arrangement among countries. As an international organization it faces a number of challenges, including achieving agreement over trade in services, bringing in new members from the economies in transition and developing countries, making the strengthened dispute settlement mechanism effective, and bringing about an increasingly open multilateral trading system. This volume analyzes the challenges and opportunities confronting the WTO. Several chapters address the WTO's institutional capacity directly, through such issues as the way national policies may influence or constrain the WTO, the difficulties of achieving coherence with the World Bank and the IMF, and the resources available to the WTO's secretariat in relation to the tasks it faces. Other papers in this volume consider more contemporary policy issues facing the WTO, including how to bring services trade into an open multilateral framework, how dispute settlement mechanisms can be improved, and how other concerns, such as labour standards and environmental issues may be addressed. Two papers focus on the WTO's relationship to developing countries and countries in transition, and an introductory chapter provides an overview of the WTO's operation. The text presumes no technical background in economics.

Exploring the political and economic determinants of trade protection, this study provides a wealth of information on key American industries to document the process of seeking and conferring protection. In eight parallel analytical histories of the automobile, steel, semiconductor, lumber, wheat, and textile and apparel industries, the contributors demonstrate that trade barriers rarely have unequivocal benefits and may indeed be counterproductive in the long run. They also find that the political and administrative criteria for awarding protection do not take into account the interests of final consumers, other American industries, or foreign countries. Political influence and a well-organized lobby, they show, are major sources of protection. Also included is a cross-section study of the determinants of administered protection that sheds light on the overall political economy of protection. A concluding essay integrates these findings and suggests that current protection practices fail to consider adequately economic efficiency, the public good, and a wide range of indirect negative economic effects. This volume will be of interest to scholars in economics, business, and public policy who are concerned with trade issues.

The increased mobility and volume of international capital flows is a striking trend in international finance. While countries worldwide have engaged in financial deregulation, nowhere is this pattern more pronounced than in East Asia, where it has affected in unanticipated ways the behavior of exchange rates, interest rates, and capital flows. In these thirteen essays, American and Asian scholars analyze the effects of financial deregulation and integration on East Asian markets. Topics covered include the impact of financial liberalization in Japan, Korea, and Singapore, macroeconomic policy implications for financial management of export-led growth in Korea and Taiwan, the roles of the United States and Japan in trading with Asian countries, and the effects of foreign direct investment in China. Demonstrating the complexity of financial deregulation and the challenges it poses for policy makers, this volume provides an excellent picture of the overall status of East Asian financial markets for scholars in international finance and Asian economic development.

Although it advocates free trade, the U.S. government often provides trade protection for American industries. This volume is a clear and concise examination of the level, form, and evolution of American trade protection. In case studies of trade barriers imposed during the 1980s to help the steel, semiconductor, automobile, lumber, wheat, and textile and apparel industries, the contributors trace the evolution of efforts to obtain protection, protectionist measures, and their results. Also included is a cross-section study of the determinants of administered protection that sheds light on the overall political economy of protection. In a chapter assessing the common themes that emerge from the studies, a number of conclusions are drawn. Among these are that the focus of current trade law is exclusively on the individual protection-seeking industries, with little regard for indirect effects on using industries or for consumers. Reform could usefully take these effects into account. This volume will be of interest to policymakers, business executives, and anyone interested in current trade policy formulation and practice.

The author considers the implications of deeper integration in the international economy for developing countries. She traces the reasons for the developing countries' reversals of earlier policies and demonstrates the importance of the open trading system for them.

Anne O. Krueger is professor of economics at Stanford University

This volume explores the macroeconomic experience of East Asia in the 1980s and the impact of the region's growth on the rest of the world. The authors examine variables such as current account surpluses and deficits, as well as the ways in which exchange rate fluctuations in today's global economy affect the economies of countries not only in the same region but across the globe. These fourteen papers are organized around four themes: the overall determinants of growth and trading relations in the region; monetary policies in relation to capital controls and capital accounts; the impact of exchange rates on industrial structure; and the potential for greater regional integration. The contributors cover topics such as interactions among exchange rate movements, trade balances, and capital flows in Japan, Korea, and Taiwan, and the impact of exchange rates on industrial structure, inventories, and prices of both domestic and exported goods. One set of papers, examining the role of government monetary policy, reveals that when oil prices declined in Taiwan and the government loosened its monetary policy, growth increased without inflation. Another set of papers, focusing on the extent of regional integration in East Asia, finds that most of these nations' currencies are more closely tied to the dollar than to the yen. Macroeconomic Linkage offers a careful study of economic developments in East Asia that will be especially valuable to economists interested in international trade and exchange rates and to regional experts who focus on East Asia.

The rapid emergence of East Asia as an important geopolitical-economic entity has been one of the most visible and striking changes in the international economy in recent years. With that emergence has come an increased need for understanding the problems of interdependence. As a step toward meeting this need, the National Bureau of Economic Research joined with the Korea Development Institute to sponsor this volume, which focuses on the complexities of tax reform in a global economy. Experts from Taiwan, Korea, the Philippines, Japan, and Thailand, as well as the United States, Canada, and Israel examine the major tax programs of the 1980s and their domestic and international economic effects. The authors provide overviews, country studies, and analyses of the effect of taxes on specific economic behavior, including saving and economic growth. The overviews include an examination of the link between taxes and domestic capital formation in open economies, and a look at the similarities and differences in the tax structure of eight East Asian countries. Other papers address broad issues related to tax policy and economic performance. Contributors evaluate the effects of changing the marginal tax rate on income from capital; analyze the relation between Korea's tax structure and its rate of economic growth; study the impact of tax reform and the aging Japanese population on savings; compare and contrast the gift and estate tax systems of the United States and Japan; and examine whether the tax systems of Korea and Taiwan, particularly the taxation of foreign capital, distort resource allocation. Studies of the political and economic interactions that underlie tax reform in the UnitedStates, Japan, Korea, and Taiwan reveal that in au of these countries domestic political considerations were far more important than international issues when deciding on tax reforms. Economists, policymakers, and members of the business community will benefit from these studies.

During the first three decades following the Second World War, an increasingly open international trading system contributed to unprecedented economic growth throughout the world. But in recent years, that openness has been threatened by increased protectionism, regional trading arrangements - Europe 1992 and the U.S.-Canada Free Trade Agreement - and setbacks in negotiations on the General Agreement on Tariffs and Trade. In Trade and Protectionism, American and East Asian scholars consider the dangers of this trend for East Asian countries in particular and the world economy in general. The first two papers in the volume look at the context in which East Asian trading relations with the United States take place. The papers focus on the role of GATT, the importance of an open multilateral trading system, and the current threats to it. An analysis of the United States' regional trading arrangements is also included. The second set of papers addresses sensitive sectoral issues that have led to frictions in Japanese-American semiconductor trade and agricultural protection among Japan, Korea, and Hong Kong. In the third group of studies, the authors examine U.S.-Japanese trade issues, the impact of U.S.-administered protection on Korean exports, and the openness of the Japanese market to exports from other Asian countries. Next, aspects of international economic relations among Asian countries are considered. Two studies explore foreign direct investment relations between Japan and other Asian countries, and the relationship between Japanese foreign direct investment and trade flows among Asian countries. The final five papers analyze how political-economic interaction affects levels ofprotection, focusing on the political economy of protection in Korea and Taiwan. This is the second volume in the series to come from the National Bureau of Economic Research-East Asia Seminar on Economics. The first volume, The Political Economy of Tax Reform, addresses tax reform in the global economy.