Essays in International Finance and Macroeconomics

Thesis (Ph.D.)--University of Washington, 2016-08

Econometric models in foreign exchange market

According to the significance of the econometric models in foreign exchange market, the purpose of this research is to give a closer examination on some important issues in this area. The research covers exchange rate pass-through into import prices, liquidity risk and expected returns in the currency market, and the common risk factors in currency markets. Firstly, with the significant of the exchange rate pass-through in financial economics, the first empirical chapter studies on the degree of exchange rate pass-through into import in emerging economies and developed countries in panel evidences for comparison covering the time period of 1970-2009. The pooled mean group estimation (PMGE) is used for the estimation to investigate the short run coefficients and error variance. In general, the results present that the import prices are affected positively, though incompletely, by the exchange rate. Secondly, the following study addresses the question whether there is a relationship between cross-sectional differences in foreign exchange returns and the sensitivities of the returns to fluctuations in liquidity, known as liquidity beta, by using a unique dataset of weekly order flow. Finally, the last study is in keeping with the study of Lustig, Roussanov and Verdelhan (2011), which shows that the large co-movement among exchange rates of different currencies can explain a risk-based view of exchange rate determination. The exploration on identifying a slope factor in exchange rate changes is brought up. The study initially constructs monthly portfolios of currencies, which are sorted on the basis of their forward discounts. The lowest interest rate currencies are contained in the first portfolio and the highest interest rate currencies are in the last. The results performs that portfolios with higher forward discounts incline to contain higher real interest rates in overall by considering the first portfolio and the last portfolio though the fluctuation occurs.

Assessment and curriculum reform in China : the college English test and tertiary English as a foreign language education.

Educational assessment was a worldwide commonplace practice in the last century. With the theoretical underpinnings of education shifting from behaviourism and social efficiency to constructivism and cognitive theories in the past two decades, the assessment theories and practices show a widespread changing movement. The emergent assessment paradigm, with a futurist perspective, indicates a deviation away from the prevailing large scale high-stakes standardised testing and an inclination towards classroom-based formative assessment. Innovations and reforms initiated in attempts to achieve better education outcomes for a sustainable future via more developed learning and assessment theories have included the 2007 College English Reform Program (CERP) in Chinese higher education context. This paper focuses on the College English Test (CET) - the national English as a Foreign Language (EFL) testing system for non-English majors at tertiary level in China. It seeks to explore the roles that the CET played in the past two College English curriculum reforms, and the new role that testing and assessment assumed in the newly launched reform. The paper holds that the CET was operationalised to uplift the standards. However, the extended use of this standardised testing system brings constraints as well as negative washback effects on the tertiary EFL education. Therefore in the newly launched reform -CERP, a new assessment model which combines summative and formative assessment approaches is proposed. The testing and assessment, assumed a new role - to engender desirable education outcomes. The question asked is: will the mixed approach to formative and summative assessment provide the intended cure to the agony that tertiary EFL education in China has long been suffering - spending much time, yet achieving little effects? The paper reports the progresses and challenges as informed by the available research literature, yet asserts a lot needs to be explored on the potential of the assessment mix in this examination tradition deep-rooted and examination-obsessed society.

From 'sympathetic' to 'dialogic' imagination : cultural study in the foreign language classroom

This chapter reports on a critical literacy approach to developing intercultural competence in an EFL/ESL classroom: an approach which uses a form of 'connective analysis' between linguacultures leading to productive exploration of the interstices between cultures.

Scaffolding an EFL (English as a foreign language) ‘effective writing’ class in a hybrid learning community

This study sought to establish and develop innovative instructional procedures, in which scaffolding can be expanded and applied, in order to enhance learning of English as a Foreign Language (EFL) writing skills in an effective hybrid learning community (a combination of face-to-face and online modes of learning) at the university where the researcher is working. Many educational experts still believe that technology has not been harnessed to its potential to meet the new online characteristics and trends. There is also an urgency to reconsider the pedagogical perspectives involved in the utilisation of online learning systems in general and the social interactions within online courses in particular that have been neglected to date. An action research design, conducted in two cycles within a duration of four months, was utilised throughout this study. It was intended not only to achieve a paradigm shift from transmission-absorption to socio-constructivist teaching/learning methodologies but also to inform practice in these technology-rich environments. Five major findings emerged from the study. First, the scaffolding theory has been extended. Two new scaffolding types (i.e., quasi-transcendental scaffolding and transcendental scafolding), two scaffolding aspects (i.e., receptive and productive) and some scaffolding actions (e.g., providing a stimulus, awareness, reminder, or remedy) for EFL writing skills in an effective hybrid learning community have been identified and elaborated on. Second, the EFL ‘Effective Writing’ students used the scaffolds implemented in a hybrid environment to enhance and enrich their learning of writing of English essays. The online activities, conducted after the F2F sessions most of the time, gave students greater opportunities to both reinforce and expand the knowledge they had acquired in the F2F mode. Third, a variety of teaching techniques, different online tasks and discussion topics utilised in the two modes bolstered the students’ interests and engagement in their knowledge construction of how to compose English-language essays. Fourth, through the scaffolded activities, the students learned how to scaffold themselves and thus became independent learners in their future endeavours of constructing knowledge. Fifth, the scaffolding-to-scaffold activities provided the students with knowledge on how to effectively engage in transcendental scaffolding actions and facilitate the learning of English writing skills by less able peers within the learning community. Thus, the findings of this current study extended earlier understandings of scaffolding in an EFL hybrid learning environment and will contribute to the advancement of future ICT-mediated courses in terms of their scaffolding pedagogical aspects.

Is there timing ability in currency markets? Evidence from ADR issuances

Is there timing ability in the exchange rate markets? We address this question by examining foreign firms' decisions to issue American Depositary Receipts (ADRs). Specifically, we test whether foreign firms consider currency market conditions in their ADR issuance decisions and, in doing so, display some ability to time their local exchange rate market. We study ADR issuances in the U.S. stock market between 1976 and 2003. We find that foreign firms tend to issue ADRs after their local currency has been abnormally strong against the U.S. dollar and before their local currency becomes abnormally weak. This evidence is statistically significant even after controlling for local and U.S. past and future stock market performance and predicable exchange rate movements. Currency market timing is especially significant i) for value companies, relatively small (yet absolutely large) companies issuing relatively large amounts of ADRs, companies with higher currency exposure, manufacturing companies, and emerging market companies, ii) during currency crises (when mispricings are rife) and after the integration of the issuer's local financial market with the world capital markets, iii) when the ADR issue raises capital for the issuing firm (Level III ADR), and iv) regardless of the identity of the underwriting investment bank. Currency market timing is also economically significant since it translates into total savings for the issuing firms of about $646 million (or 1.86% of the total capital-raising ADR issue volume). In contrast, we find no evidence of currency timing ability in a control sample made of non-capital raising ADRs (Level II ADRs). These findings suggest that some companies may have, at least occasionally, private information about foreign exchange.