Publications:
World Bank Report:
- Maldives Development Update : Navigating Choppy Seas. Publication Link.
Journals:
- Monetary Trilemma, Dilemma or Something In Between?
(With Ramkishen S. Rajan)
This paper revisits the monetary “trilemma” versus “dilemma” debate by examining empirically interest-rate policy independence for a large sample of both advanced and developing countries over the period 1973–2014. We broadly concur with the growing body of literature that suggests that the trilemma still holds, emphasizing the important insulating effects afforded by exchange-rate flexibility. However, as with Han and Wei (2018), we also document the existence of an asymmetric pattern or 2.5-lemma between the trilemma and dilemma; though, in contrast to them, we find there seems to be evidence of a “fear of capital reversal” rather than a “fear of appreciation.” We further find that holding higher levels of foreign reserves may help countries regain a degree of monetary-policy autonomy.
- House Price Decoupling in East Asia and the Pacific: Trilemma versus Dilemma Revisited
(With Ramkishen S. Rajan)
This paper investigates the extent to which local property prices co-move with global property prices for selected East Asia and the Pacific (EAP) economies. Having documented the existence of house price synchronicity, the main focus of the paper is on the extent to which global financial integration in the housing markets in the EAP economies is characterized by the monetary trilemma versus dilemma proposition. The paper finds that capital controls possess effective insulating properties while exchange rate flexibility does not, offering some evidence in favor of the dilemma rather than the trilemma. The paper also finds that borrower-based macro-prudential policies can reduce synchronicity when capital accounts are open.
Book Chapters:
- "Has the "Impossible Trilemma" Morphed into a "Dilemma"?," Chapter 2, in Complexities of Financial Globalisation: Analytical and Policy Issues in Emerging and Developing Economies, Routledge (2020).
Op-Eds:
- “List best practices for use of macro-prudential policies in housing market” The Business Times, October 14, 2020.
- "Rise of sovereign digital currencies: domestic and global implications" The Business Times, November 18, 2020.
Research Papers:
- A tale of two cities – the effectiveness of macro-prudential policies in regulating the property market in Hong Kong and Singapore (Manuscript available upon request)
- Property tax, home purchase restriction, expectation and housing prices: an empirical study of 35 large and medium-sized cities in China (Manuscript available upon request)
- Climate Risks:Assessing the Nexus between Green Financial Policies and Fiscal Space (Manuscript available upon request) (with Bhavya Gupta and Ramkishen S. Rajan)
- Do Green Financial Policies Offset the Climate Transition Risk Penalty Imposed on Sovereign Bond Yields? (Manuscript available upon request) (with Bhavya Gupta and Ramkishen S. Rajan)
- Why are Some Countries Greening Financial Regulatory Policies Faster than Others? (Manuscript available upon request) (with Bhavya Gupta and Ramkishen S. Rajan)
Working Papers:
- RMB Internationalization and Trilemma Constraints (Manuscript available upon request) (with P.S. Srinivas)
China has had ambitious plans to internationalize the Renminbi (RMB) since the beginning of the 21st century. To achieve this objective, it has taken a series of steps over the past two decades and more particularly, since the global financial crisis of 2008. This paper provides an empirical study of the challenges facing China in internationalizing the RMB as it deals with the constraints dictated by the classic trilemma of international economics which states that a country can simultaneously only have any two of three policy objectives – an open capital account or free capital flows, a fixed exchange rate, and an independent monetary policy. Therefore, China is forced to choose between the degree to which it liberalizes its capital account and exchange rate regimes and the degree of monetary policy autonomy it maintains. As the world’s second-largest economy with a large domestic market, monetary policy autonomy provides Chinese policymakers an important lever to conduct effective macroeconomic management. However, this in turn determines the degree to which exchange rate flexibility along with a more open capital account can be maintained. All three, in turn, impact the degree of internationalization of the RMB.
Policy Briefs:
- Renminbi Internationalisation (I): A Historical Review And China’s Policy Measures
- Renminbi Internationalisation (II): Progress And Prospects
Works In Progress:
- How do macro-prudential policies affect output growth, inflation, and their volatilities: a propensity score matching approach
- Terms of trade shock and impact on macroeconomic performance - a cross-country SVAR analysis
- Drivers of currency internationalisation
Academic Services:
Journal Referee for Journal of International Financial Markets, Institutions & Money
Journal Referee for Journal of International Money and Finance
Journal Referee for International Review of Economics and Finance
Journal Referee for Journal of Asian Economics