Thursday, December 26, 2013

Debt, Deficits, and Government Assets

I’ve been asked by a number of people to comment on this (excerpt):

Laporan Bank Dunia: Kerajaan BN Jual Aset Negara Untuk Capai Sasaran Defisit

Pentadbiran Dato’ Seri Najib Tun Razak terus mengumumkan angka-angka untuk meyakinkan orang ramai dan institusi kewangan bahawa beliau serius untuk mengekang tahap keberhutangan negara. Sasaran yang diletakkan ialah untuk menurunkan defisit ke paras 4% dari jumlah Keluaran Dalam Negara Kasar (KDNK)…

…Lebih memeranjatkan, Dato’ Seri Najib Tun Razak dilaporkan akan mengambil jalan menjual aset negara dan menerbitkan lebih banyak sekuriti hutang dari aset-aset negara semata-mata untuk menutup kegagalan pentadbiran ekonomi beliau mencapai sasaran defisit yang beliau sendiri tetapkan.

Tuesday, December 24, 2013

Monday, December 23, 2013

Containing Housing Price Appreciation: Assessing The Options

There’s a growing body of work examining the effect of macroprudential policies on asset prices. This one offers a fairly comprehensive assessment (abstract):

Can Non-Interest Rate Policies Stabilize Housing Markets? Evidence from a Panel of 57 Economies
Kenneth N. Kuttner, Ilhyock Shim

Using data from 57 countries spanning more than three decades, this paper investigates the effectiveness of nine non-interest rate policy tools, including macroprudential measures, in stabilizing house prices and housing credit. In conventional panel regressions, housing credit growth is significantly affected by changes in the maximum debt-service-to-income (DSTI) ratio, the maximum loan-to-value ratio, limits on exposure to the housing sector and housing-related taxes. But only the DSTI ratio limit has a significant effect on housing credit growth when we use mean group and panel event study methods. Among the policies considered, a change in housing-related taxes is the only policy tool with a discernible impact on house price appreciation.

Friday, December 20, 2013

November 2013 Consumer Prices

Consumer prices in November (released last Wednesday) has continued to accelerate (log annual and monthly changes; 2000=100):


Friday, December 13, 2013

October 2013 Industrial Production

Industrial output appears to be moderating a little (log annual and monthly changes; seasonally adjusted):



Wednesday, December 11, 2013

The Minimum Wage In South Africa

From a recent post on the World Bank’s Future Development Blog (excerpt):

A Tale of Two Impacts: Minimum Wage Outcomes in South Africa
Haroon Bhorat

…The evidence for South Africa, some twenty years after the demise of apartheid, is equally compelling. In a two-part study, my co-authors and I find an intriguing set of contrasting economic outcomes, from the imposition of a series of sectoral minimum wage laws….Currently, the economy has in place 11 such sectoral minimum wage laws in sectors ranging from Agriculture and Domestic Work, to Retail and Private Security….

Tuesday, December 10, 2013

Skewed Incentives In Academic Research

I think this will sound troublingly familiar to most Malaysian academics, and not just within the economics community (excerpt; emphasis added):

Our uneconomic methods of measuring economic research
Stan Liebowitz

Academic economists – especially in the US – are continuously evaluated, with salaries and promotions hanging on outcomes. This column argues that the methods – identified from a survey of economics department chairs – are likely to reduce the amount of research created, perpetuate inefficiently sized research teams, promote false authorship, and penalise honest researchers. They also provide departments with excessive leeway to engage in potentially capricious behaviour.

Trade And IP Protection

From the East Asia Forum (excerpt):

Trade held hostage to IP — it’s anti-development
Philippa Dee, ANU

Now that the intellectual property chapter of the Trans-Pacific Partnership has been leaked, our worst fears are confirmed — IP in TPP is OTT.

This would be bad enough on its own. What is less well recognised is that the trade liberalisation agenda is being held hostage to the IP agenda, and the result is inimical to development.

Monday, December 9, 2013

Minimum Wage Portal

The Ministry of Human Resources has launched a portal for the Malaysia’s Minimum Wage, providing FAQs and info for employers and employees. You can access it here.

Friday, December 6, 2013

October 2013 External Trade

Recovery on the trade front seems firmly entrenched, based on the latest numbers (log annual and monthly changes; seasonally adjusted):


3Q2013 Government Debt Update

As outlined in the previous post, debt growth has slowed this year (log annual and quarterly changes):


3Q2013 Government Finance

The latest data on government finance is now available (RM millions):


Wednesday, December 4, 2013

GLCs And The Public-Private Nexus

I got a call from a reporter the other day asking about this, so I’m going to set my thoughts down on paper (figuratively speaking, of course).

There’s this idea that government and government linked companies (GLCs) dominate Malaysia’s corporate landscape – Maybank, CIMB, Sime Darby, Tenaga, Telekom, and the like. These companies are either virtual monopolies, or dominate their respective industries, possibly crowding out competition and investment.