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Assessing co-ordinated Asian exchange rate regimes: Proposal for a possible move towards a common currency

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Author Info

  • Aggarwal, Raj
  • Muckley, Cal B.

Abstract

This study assesses prospective Asian exchange rate regimes and finds short- and long-run currency dynamics more conducive to the introduction of a common peg based on a basket of the European euro, the United States dollar and the Japanese yen than the alternative of a United States dollar peg exchange rate regime. Exchange rate systems of 3- 4- and 5-Asian currencies are considered and the dynamics in a set of four European currencies prior to the introduction of the Euro provides benchmark evidence. The evidence for an Asian basket peg exchange rate regime is strengthened when, unlike prior studies, estimates of the long-run parameters account for time-varying volatility effects.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of International Financial Markets, Institutions and Money.

Volume (Year): 20 (2010)
Issue (Month): 2 (April)
Pages: 149-165

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Handle: RePEc:eee:intfin:v:20:y:2010:i:2:p:149-165

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Web page: http://www.elsevier.com/locate/intfin

Related research

Keywords: Asia Basket exchange rates Currency pegs Exchange rate regimes;

References

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Cited by:
  1. Kannan Thuraisamy & Gerard Gannon, 2012. "Modelling the Sovereign Linkages of Key Latin American Economies," Financial Econometics Series 2012_03, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.

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