Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53435
Authors: 
Kawai, Masahiro
Year of Publication: 
2007
Series/Report no.: 
ADB Institute Discussion Papers 68
Abstract: 
Deepening market-driven economic integration in East Asia makes intraregional exchange rate stability across the region increasingly desirable and necessary. This paper suggests that East Asia's emerging economies begin with a currency basket system based on the G3 (US, Euro area and Japanese) or G3-plus (including emerging East Asian) currencies as a monetary policy anchor. This arrangement will enable all East Asian currencies to collectively appreciate vis-à-vis the US dollar, while maintaining intraregional rate stability, in the event of continuous surges of capital inflows to East Asia or a rapid unwinding of global payments imbalances. Such a system would contribute as an initial step to an East Asian monetary zone. After sufficient convergence and with stronger political commitment, East Asia may agree on more rigid intraregional exchange rate stabilization schemes through, for example, an Asian Snake or an Asian Exchange Rate Mechanism.
Subjects: 
Exchange rate arrangement in East Asia
yen and yuan
new Bretton Woods system
G-3 or G3-plus currency basket regime
Asian currency unit (ACU)
JEL: 
F32
F33
F42
Document Type: 
Working Paper

Files in This Item:
File
Size
324.01 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.