With the rapid growth of China and India and the resurgence of Southeast Asia post-1997-8, emerging Asia has once again become one of the most dynamic regions in the world. This dynamism has in turn been fuelled largely by a carefully calibrated embracement of economic openness to international trade, investments and capital flows. While much has been written about international trade, there has been somewhat less work on the issue of capital flows, macroeconomic management and foreign direct investment (FDI) to and from the region, a gap that this book attempts to fill. The book is divided into two parts. The first part deals with selected issues pertaining to macroeconomic management in small and open economies, with particular focus on exchange rates. The second part of the book deals with the trends and determinants of FDI in emerging Asia, its importance as a source of finance, its impact on growth and development, and the nexus between FDI and foreign portfolio flows (FPI). Overall, the chapters in this book tackle important policy issues of contemporary relevance, but are informed by analytical frameworks, data and empirics. While each of the topic areas chosen in individual chapters is intentionally narrow, the book as a whole covers a number of areas and countries/regions within Asia (i.e. East, Southeast and South Asia). While the chapters have been written in a manner that can stand up to academic scrutiny, they are also meant to be accessible to policy makers, researchers and others who might be interested in FDI and related issues in Asia.

Ramkishen S. Rajan is Visiting Professor at the Lee Kuan Yew School of Public Policy, National University of Singapore and Professor of Public Policy and International Economic Policy at George Mason University (GMU) in Virginia. He is also Visiting Senior Research Fellow and joint coordinator of the Regional Economic Studies Program at the Institute of Southeast Asian Studies (ISEAS) in Singapore.

Part 1: Exchange Rates Regimes and Policies 1. How can Small and Open Economies Manage Capital Inflows, with Alice Ouyang 2. Do Exchange Rate Changes Pass-through into Inflation in Developing Countries?, with Venkataramana Yanamandra 3. What is the Extent of Exchange Rate Flexibility in South Asia, with Tony Cavoli 4. How can Small and Open Economies in Emerging Asia Deal with External Shocks 5. What Role has the Real Exchange Rate Played in Asian Economic Development?, with Javier Beverinotti Part 2: Foreign Direct Investment in Emerging Asia 6. What is the Implact of FDI on Asian Growth and Development?, with Sasidaran Gopalan 7. How Significant is Intra-ASian FDI Flows and What are its Determinants?, with Rabin Hattari 8. How has Singapore expanded its Global Footprint through FDI?, with Aekapol Chongvilaivan 9. What is the Extent and Distribution of FDI Inflows to India?, with Sasidaran Gopalan 10. How Different are FDI Flows from Portfolio Flows?, with Rabin Hattari