Responding to the Global Financial Crisis : The Evolution of Asian Regionalism and Economic Globalization
Abstractï»¿This paper examines the evolving dynamics between economic globalization and Asian regional interdependence, and asks whether and how the global financial crisis impacted Asian regionalism. The analysis suggests that the global crisis did trigger advances in regional policy cooperation from 2007 onwards, especially in the area of financial and monetary cooperation. Although the first order response of Asian countries was to join the broader global effort to contain financial freefall at the world level, there emerged a second order response at the level of regional institutional building, specifically to â€œmultilateralizeâ€ the Chiang Mai Initiative, and to develop a regional trust fund to help strengthen Asian bond markets. This finding reconfirms the theoretical proposition in historical institutionalism that financial crises have a catalytic effect in stimulating regional innovation. At the same time, we see evolution in the pattern of Asian regionalism in two respects : first, the recent advances in Asian regionalism are being driven primarily, at this stage, by the rise of the PRC and Indiaâ€”although each in their own way, and to varying degrees. The current advance in regionalism also builds on momentum provided by pre-existing programs of regional financial cooperation, namely the Chiang Mai Initiative, and â€œregional connectivityâ€ programs that have also been championed by Japan and ASEAN countries, such as the GMS, CAREC, and BIMSTEC initiatives. Second, Asian economies appear to be pursuing inclusive regionalism, which attempts to strike a balance between helping themselves and helping the global economy. Asia is striving for modes of regional cooperation that are, on balance, complementary with the current global macroeconomic rebalancing agenda of the G20, and supportive of global integration and openness. The main policy findings are that Asiaâ€™s future standing in an increasingly multi-centered world economy will be determined by its effectiveness in advancing a multi-layered international cooperation agenda. Yet achieving such international gains will depend on Asiaâ€™s willingness to make serious advances in regional collective action and global leadership, especially in areas of financial and monetary cooperation.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Governance Working Papers with number 23193.
Date of creation: Jan 2012
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Economic Globalization; Asian regionalism; Asian regional interdependence; global financial crisis; regional cooperation;
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- F51 - International Economics - - International Relations and International Political Economy - - - International Conflicts; Negotiations; Sanctions
- F53 - International Economics - - International Relations and International Political Economy - - - International Agreements and Observance; International Organizations
- F55 - International Economics - - International Relations and International Political Economy - - - International Institutional Arrangements
- F59 - International Economics - - International Relations and International Political Economy - - - Other
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-14 (All new papers)
- NEP-CWA-2012-03-14 (Central & Western Asia)
- NEP-MON-2012-03-14 (Monetary Economics)
- NEP-OPM-2012-03-14 (Open Economy Macroeconomic)
- NEP-SEA-2012-03-14 (South East Asia)
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