Macroeconomic stabilization policy in emerging Asia requires attention to both internal and external balance under constraints on policy space. My textbook, “Macroeconomics for Emerging East Asia” (Cambridge University Press, 2022), develops an analytical framework suited to understanding macro fluctuations and policy management within this context. The framework provides guidance on how to coordinate the monetary and fiscal arms of macro policy to pursue balance both internally (growth at potential with inflation low and stable) and externally (positions on the current and financial accounts of the balance of payments at sustainable targets) simultaneously. Monetary policy is fashioned with respect to the interest rate and the exchange rate as intertwining instruments, and is constrained by global capital flows. Fiscal policy is constrained by debt sustainability concerns in view of the debt-to-GDP ratio and its trajectory based on the interest rate and the GDP growth rate.

The keynote speech will apply the analytical framework of the text to interpreting current macro policy in 12 Asian economies:  Bangladesh; China; Hong Kong; India; Indonesia; Korea; Malaysia; the Philippines; Singapore; Taiwan; Thailand; and Vietnam. In response to Covid, these economies undertook major stimulus, from which they must now revert course. The space for managing policy in Asia is influenced by US policy acting on global capital flows. US stimulus in response to Covid kept global interest rates low, affording space for Asian economies to pursue their own expansionary policies under buoyant exchange rate conditions. All too soon, however, such broad-based stimulus caused inflation to surge up, prompting the US to tighten. As US interest rates have risen, capital has been drawn away from emerging economies, putting downward pressure on their currency values and compelling them to tighten as well. The presentation will assess these conditions and draw conjectures on the way forward.

Calla Wiemer is the author of Macroeconomics for Emerging East Asia (Cambridge University Press, 2022), a textbook aimed at disrupting the US-centric approach to teaching macro long predominant in Asia. As president of the American Committee on Asian Economic Studies, she moderates the Asia Economics Blog. And as a member of the US National Business Economic Issues Council, she briefs US corporate economists on conditions in Asia. Professor Wiemer has taught at the University of Hawaii at Manoa (1984-1996), the National University of Singapore (2004-2008), Claremont McKenna College (2010), IES Abroad at Beijing Foreign Studies University (2012-2013), the University of the Philippines Diliman (2015-2018), and the KDI School of Public Policy and Management (2019). She served as editor-in-chief of the Journal of Asian Economics from 2015 to 2020 and is currently on the editorial boards of Asian Economics Letters and the Asian Journal of Economics and Banking. Her major consulting projects have involved work on cross-border economic relations in Central Asia (1997-2001) and development of sample survey techniques for measuring small scale industry for China’s GDP accounts (2001-2002). Dr. Wiemer received her Ph.D. in economics from the University of Wisconsin-Madison with dissertation research at Nanjing University. She is bicontinental with homes in Los Angeles and Manila.