IDEAS home Printed from https://ideas.repec.org/a/taf/jpolrf/v6y2003i1p35-49.html

Regional Currencies Versus Dollarization: Options for Asia and the Americas

Author

Listed:
  • Felipe Larraín B.
  • José Tavares

Abstract

This paper undertakes an empirical assessment of Dollarization versus regional currency union as options for the economies of East Asia, South America and Central America. We use summary indicators of bilateral integration to examine the determinants of real exchange rate volatility within each region and between each region and the United States. While Europe is characterized by a high degree of regional integration, there is evidence of increasing integration in East Asia and persistently low integration in the Americas, especially as compared to the levels of bilateral integration vis-à-vis the United States. Our estimates confirm the patterns of regional integration above and reveal substantial regional differences as to the determinants of real exchange rate volatility.

Suggested Citation

  • Felipe Larraín B. & José Tavares, 2003. "Regional Currencies Versus Dollarization: Options for Asia and the Americas," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(1), pages 35-49.
    • Handle: RePEc:taf:jpolrf:v:6:y:2003:i:1:p:35-49
    DOI: 10.1080/13841280309602
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13841280309602
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13841280309602?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Barry Eichengreen, 1998. "Does Mercosur Need a Single Currency," NBER Working Papers 6821, National Bureau of Economic Research, Inc.
    2. repec:bla:etrans:v:10:y:2002-07:i:2:p:365-392 is not listed on IDEAS
    3. Frankel, Jeffrey A. & Rose, Andrew K., 1996. "Economic Structure and the Decision to Adopt a Common Currency," Center for International and Development Economics Research (CIDER) Working Papers 233436, University of California-Berkeley, Department of Economics.
    4. Tornell, Aaron & Velasco, Andres, 2000. "Fixed versus flexible exchange rates: Which provides more fiscal discipline?," Journal of Monetary Economics, Elsevier, vol. 45(2), pages 399-436, April.
    5. Bayoumi, Tamim & Eichengreen, Barry, 1998. "Exchange rate volatility and intervention: implications of the theory of optimum currency areas," Journal of International Economics, Elsevier, vol. 45(2), pages 191-209, August.
    6. Tamim Bayoumi & Paolo Mauro, 2001. "The Suitability of ASEAN for a Regional Currency Arrangement," The World Economy, Wiley Blackwell, vol. 24(7), pages 933-954, July.
    7. Felipe Larraín & Andrés Velasco, 2002. "How should emerging economies float their currencies?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(2), pages 365-392, July.
    8. Maurice Obstfeld & Kenneth Rogoff, 1995. "The Mirage of Fixed Exchange Rates," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 73-96, Fall.
    9. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-1025, July.
    10. Ruth A. Judson & Richard D. Porter, 1996. "The location of U.S. currency: how much is abroad?," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 82(Oct), pages 883-903, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hochreiter, Eduard & Siklos, Pierre L., 2002. "Alternative exchange-rate regimes: The options for Latin America," The North American Journal of Economics and Finance, Elsevier, vol. 13(3), pages 195-211, December.
    2. Levy Yeyati, Eduardo & Sturzenegger, Federico, 2010. "Monetary and Exchange Rate Policies," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4215-4281, Elsevier.
    3. Cordeiro, Jose Luis, 2008. "Monetary Systems in Developing Countries: An Unorthodox View," IDE Discussion Papers 154, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Kwack, Sung Yeung, 2004. "An optimum currency area in East Asia: feasibility, coordination, and leadership role," Journal of Asian Economics, Elsevier, vol. 15(1), pages 153-169, February.
    5. Kawai, Masahiro & Takagi, Shinji, 2000. "Proposed strategy for a regional exchange rate arrangement in post-crisis East Asia," Policy Research Working Paper Series 2503, The World Bank.
    6. Felipe Larraín & Francisco Parro, 2003. "¿Importa la Opción de Régimen Cambiario? Evidencia para Países en Desarrollo," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(121), pages 635-645.
    7. Robert Lafrance & Pierre St-Amant, 2000. "Les zones monétaires optimales," L'Actualité Economique, Société Canadienne de Science Economique, vol. 76(4), pages 577-612.
    8. Alexis Cruz-Rodriguez, 2013. "Choosing and Assessing Exchange Rate Regimes: a Survey of the Literature," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 28(2), pages 37-61, October.
    9. Agiomirgianakis, George M. & Zervoyianni, Athina, 2001. "Economic growth, international labour mobility, and unanticipated non-monetary shocks," Journal of Policy Modeling, Elsevier, vol. 23(1), pages 1-16, January.
    10. Sánchez, Marcelo, 2005. "Is time ripe for a currency union in emerging East Asia? The role of monetary stabilisation," Working Paper Series 567, European Central Bank.
    11. Pradumna B. Rana, 2007. "Trade Intensity and Business Cycle Synchronization: The Case of East Asia," Working Papers on Regional Economic Integration 10, Asian Development Bank.
    12. repec:ptu:bdpart:b200410 is not listed on IDEAS
    13. Hefeker, Carsten & Nabor, Andreas, 2002. "Yen or Yuan? China's role in the future of Asian monetary integration," HWWA Discussion Papers 206, Hamburg Institute of International Economics (HWWA).
    14. Moneta, Fabio & Rüffer, Rasmus, 2006. "Business cycle synchronisation in East Asia," Working Paper Series 671, European Central Bank.
    15. Hochreiter, Eduard & Schmidt-Hebbel, Klaus & Winckler, Georg, 2002. "Monetary union: European lessons, Latin American prospects," The North American Journal of Economics and Finance, Elsevier, vol. 13(3), pages 297-321, December.
    16. Dong He & Wei Liao, 2012. "Asian Business Cycle Synchronization," Pacific Economic Review, Wiley Blackwell, vol. 17(1), pages 106-135, February.
    17. Berg, Andrew & Borensztein, Eduardo & Mauro, Paolo, 2002. "An evaluation of monetary regime options for Latin America," The North American Journal of Economics and Finance, Elsevier, vol. 13(3), pages 213-235, December.
    18. Emmanuel CARRÉ & Frédérique FESTOC & Patricia LE MAITRE, 2025. "Quo Vadis regional monetary integration? Major trends in the optimum currency area literature over the last 60 years: A bibliometric approach," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 62, pages 67-98.
    19. repec:prg:jnlpep:v:2013:y:2013:i:4:id:431:p:391-411 is not listed on IDEAS
    20. Alain Raybaut & Dominique Torre, 2004. "Unions monétaires, caisses d'émission et dollarisation : les fondements analytiques des systèmes de change « ultra-fixes »," Revue d'Économie Financière, Programme National Persée, vol. 75(2), pages 37-54.
    21. William Miles & Chu-Ping C. Vijverberg, 2014. "Did the Classical Gold Standard Lead to Greater Business Cycle Synchronization? Evidence from New Measures," Kyklos, Wiley Blackwell, vol. 67(1), pages 93-115, February.
    22. Debarsy, Nicolas & Dossougoin, Cyrille & Ertur, Cem & Gnabo, Jean-Yves, 2018. "Measuring sovereign risk spillovers and assessing the role of transmission channels: A spatial econometrics approach," Journal of Economic Dynamics and Control, Elsevier, vol. 87(C), pages 21-45.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jpolrf:v:6:y:2003:i:1:p:35-49. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/GPRE19 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.