Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/179221 
Year of Publication: 
2017
Series/Report no.: 
ADBI Working Paper No. 765
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
This paper considers the optimal exchange rate regime transition policy for three East Asian countries: the People's Republic of China (PRC), Malaysia, and Singapore. In contrast to two traditional approaches to exchange rate regimes in East Asia, the paper conducts a dynamic transition analysis. Based on a small, open-economy dynamic stochastic general equilibrium model applied to these three countries, we define transition policies from a dollar peg regime to either a basket peg or a floating regime and compare the welfare gains of these policies relative to maintaining the current dollar peg regime. The quantitative analysis using PRC, Malaysian, and Singaporean data shows that the PRC would be better off shifting gradually from a dollar peg to a basket peg. In response to the PRC's shift, both Malaysia and Singapore would opt to shift gradually to a basket peg regime.
Subjects: 
Economics
China
People's Republic of
Malaysia
Singapore
JEL: 
F33
F41
F42
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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