Advanced Search
MyIDEAS: Login to save this article or follow this journal

Exchange rates, global imbalances, and interdependence in East Asia

Contents:

Author Info

  • Mazier, Jacques
  • Oh, YongHyup
  • Saglio, Sophie

Abstract

The paper analyzes East Asian interdependence in the face of global imbalances. A macro-econometric multinational model is used, describing Korea, Japan, China and the rest of East Asia in their respective relations with the United States as well as with the rest of the world. US imbalances and their expected consequences, notably a depreciation of the dollar and the slowdown of US demand, have rather contrasted effects on East Asian economies, depending on relative magnitudes of the two components. Korea is more affected by the dollar depreciation while China is more exposed to the US slowdown. Japan, less open and less dependent on the US market, is less touched. The correction of East Asian exchange-rate misalignments, which have prevailed since the beginning of the 2000s, would badly affect East Asian economies if undertaken too abruptly. Lastly, the perspective of creating an area of stabilised exchange rates between won, yen and other currencies, organized either as a common currencies basket system or in a regime based on the ACU, is explored preliminarily. Sets of simulations comparing adjustment mechanisms between East Asian countries, with or without the possibility of monetary adjustment, illustrate the cost of precluding exchange-rate adjustments in the case of asymmetric demand shocks.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6W53-4RDR1C9-1/1/274a381e0903230c6c026bbd9a94fd15
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 19 (2008)
Issue (Month): 1 (February)
Pages: 53-73

as in new window
Handle: RePEc:eee:asieco:v:19:y:2008:i:1:p:53-73

Contact details of provider:
Web page: http://www.elsevier.com/locate/asieco

Related research

Keywords:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Chirathivat, Suthiphand, 2004. "East Asia FTA: economic modalities, prospects and further implications," Journal of Asian Economics, Elsevier, vol. 15(5), pages 889-910, October.
  2. Mitsuyo Ando & Fukinari Kimura, 2003. "The Formation of International Production and Distribution Networks in East Asia," NBER Working Papers 10167, National Bureau of Economic Research, Inc.
  3. Neil R. Ericsson & James G. MacKinnon, 1999. "Distributions of error correction tests for cointegration," International Finance Discussion Papers 655, Board of Governors of the Federal Reserve System (U.S.).
  4. Se-Eun Jeong & Jacques Mazier, 2003. "Exchange Rate Regimes and Equilibrium Exchange Rates in East Asia," Revue économique, Presses de Sciences-Po, vol. 54(5), pages 1161-1182.
  5. Anindya Banerjee & Juan J. Dolado & Ricardo Mestre, 1995. "On the Power of Cointegration Tests: Dimension Invariance vs. Common Factors," Working Papers 922, Queen's University, Department of Economics.
  6. Blanchard, Olivier & Giavazzi, Francesco & Sa, Filipa, 2005. "The US Current Account and the Dollar," CEPR Discussion Papers 4888, C.E.P.R. Discussion Papers.
  7. Fukao, Kyoji & Ishido, Hikari & Ito, Keiko, 2003. "Vertical Intra-Industry Trade and Foreign Direct Investment in East Asia," Discussion Paper Series a434, Institute of Economic Research, Hitotsubashi University.
  8. Mundell, Robert, 2003. "Prospects for an Asian currency area," Journal of Asian Economics, Elsevier, vol. 14(1), pages 1-10, February.
  9. Virginie Coudert & Cécile Couharde, 2005. "Real Equilibrium Exchange Rate in China," Working Papers 2005-01, CEPII research center.
  10. Jacques Mazier & Sophie Saglio, 2008. "Interdependency and adjustments in the European Union," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(1), pages 17-44.
  11. Agnès Bénassy-Quéré & Pascale Duran-Vigneron & Amina Lahrèche-Revil & Mignon, Valerie, 2004. "Burden Sharing and Exchange-Rate Misalignments within the Group of Twenty," Working Papers 2004-13, CEPII research center.
  12. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, October.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Konstantins Benkovskis & Julia Wörz, 2012. "Non-Price Competitiveness of Exports from Emerging Countries," FIW Working Paper series 100, FIW.
  2. Kubo, Akihiro, 2012. "The US tech pulse, stock prices, and exchange rate dynamics: Evidence from Asian developing countries," Journal of Asian Economics, Elsevier, vol. 23(6), pages 680-687.
  3. Andrea Fracasso & Stefano Schiavo, 2009. "Trade-imbalances networks and exchange rate adjustments: the paradox of a new Plaza. The XIVth Spring Meeting of Young Economists (SMYE-2009), Istanbul, April 2009," Sciences Po publications info:hdl:2441/10028, Sciences Po.
  4. repec:spo:wpecon:info:hdl:2441/10028 is not listed on IDEAS

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:asieco:v:19:y:2008:i:1:p:53-73. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.