Defi nitions vii
Executive Summary ix
1. Asia’s Momentum Is Set to Continue 1
Introduction and Main Findings 1
Recent Developments: Steady Growth Amid Financial Volatility 1
Regional Outlook: Growth Should Remain Robust and Infl ation Generally Low 5
Theme 1: Preparing for the Risks Ahead 14
Theme 2: Abenomics—Temporary Stimulus or a Break with the Past? 22
Theme 3: How Will China’s Reforms Shape China and Asia? 27
Theme 4: What Is Happening to Growth in ASEAN? 30
2. Corporate Leverage in Asia: A Fault Line? 33
Introduction and Main Findings 33
The Facts: How Leveraged Are Asian Firms? 37
The Risks: What Are the Characteristics of Asia’s Highly Leveraged Firms? 40
The Implications for Growth: Is Leverage a Constraint on Investment? 42
The Bottom Line 43
3. Does Growing Regional Integration Make Asian Economies Move More in Sync? 47
Introduction and Main Findings 47
Is Activity Moving More in Sync in Asia? 48
The Role of Trade Integration 49
The Role of Financial Integration 54
The Role of Synchronized Macroeconomic Policies 58
The Role of Spillovers from China 58
Implications for the Future 59
4. Macroprudential Policy and Capital Flow Measures in Asia: Use and Effectiveness 61
Introduction and Main Findings 61
Asia’s Use of Macroprudential and Capital Flow Measures 62
The Impact of Macroprudential and Capital Flow Management Policies in Asia 65
The Use of Macroprudential Policies As the Tide Flows Out 69
References 75