Energy needs in Asia are huge. Meeting these needs in a sustainable way will require a shift in investment away from fossil fuels towards renewable energy sources. Significant upfront costs and long payback periods of renewable energy projects have often discouraged investors from financing these projects. With government finances already overstretched in many countries, the public sector will find it hard to meet the large financing needs of renewable energy. Improving the financing mechanisms for renewable energy projects is essential to lower the financing cost and make the transition towards renewable energy more affordable for investors, governments, and consumers. The large pool of investable funds available in Asia suggests that the private sector can play a major role in providing financing. With heightened interest in investing in renewable energy, there is a large pool of potential investors. To attract these investors however, the investment will have to be packaged in a form that they are familiar with, which has traditionally been through bonds.
This paper examines some of the factors related to the formation of a currency union in Southeast Asia. The main part of the paper presents the results of our examination of the correlation of shocks for the Southeast Asian countries using a structural vector autoregression. The shocks are identified using restrictions on the long-run coefficient matrix as suggested by Blanchard and Quah (1989). The correlations of shocks for the EU and NAFTA countries are used for comparison. The Southeast Asian countries are shown to have more strongly correlated shocks than the EU countries. Compared with the NAFTA countries, external shocks are more closely correlated for the ASEAN countries, but the supply and demand shocks are less correlated. Indonesia, Singapore, and Malaysia, in particular, exhibit a high degree of correlation of shocks. Other criteria for monetary union, such as intra-regional trade, openness of the economy, and similarity of monetary policy are also examined.
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The present paper examines the linkages between the South-East Asian stock markets following the opening of the stock markets in the 1990s. No evidence was found to indicate a long-run relationship among the South-East Asian stock markets over the period 1988-1997; however, correlation analyses indicate that the South-East Asian stock markets are becoming more integrated. The results from the time-varying parameter model also show that the stock market returns of Indonesia, the Philippines and Thailand had all become more closely linked with that of Singapore.
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