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Prospects for Monetary Cooperation in East Asia


  • Yung Chul Park

    (Asian Development Bank Institute (ADBI))

  • Chi-Young Song


The purpose of this paper is to reexamine the exchange rate policy of the Republic of Korea, and its role in promoting financial and monetary cooperation in East Asia in the wake of the 2008 global financial crisis. The Republic of Korea would not actively participate in any discussion of establishing a regional monetary and exchange rate arrangement as it is expected to maintain a weakly managed floating regime. The People’s Republic of China (PRC) has been fostering the yuan as an international currency, which will lay the groundwork for forming a yuan area among the PRC; the Association of Southeast Asian Nations JEL Classification : F3, F4 (ASEAN); Hong Kong, China; the PRC; and Taipei,China. Japan has shown less interest in assuming a greater role in East Asia’s economic integration due to deflation, a strong yen, slow growth, and political instability. Japan would not eschew free floating. These recent developments demand a new modality of monetary cooperation among the Republic of Korea, Japan, and the PRC. Otherwise, ASEAN+3 will lose its rationale for steering regional economic integration in East Asia.

Suggested Citation

  • Yung Chul Park & Chi-Young Song, 2011. "Prospects for Monetary Cooperation in East Asia," Macroeconomics Working Papers 23222, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:macroe:23222

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    References listed on IDEAS

    1. Willem Thorbecke, 2011. "How Elastic is East Asian Demand for Consumption Goods?," Review of International Economics, Wiley Blackwell, vol. 19(5), pages 950-962, November.
    2. Thorbecke, Willem & Lamberte, Mario & Komoto, Ginalyn, 2010. "Promoting Learning and Industrial Upgrading in ASEAN Countries," ADBI Working Papers 250, Asian Development Bank Institute.
    3. Adams , Charles & Park, Donghyun, 2009. "Causes and Consequences of Global Imbalances: Perspective from Developing Asia," Asian Development Review, Asian Development Bank, vol. 26(1), pages 19-47.
    4. Ouyang, Alice Y. & Rajan, Ramkishen S. & Willett, Thomas D., 2010. "China as a reserve sink: The evidence from offset and sterilization coefficients," Journal of International Money and Finance, Elsevier, vol. 29(5), pages 951-972, September.
    5. Ma, Guonan & McCauley, Robert N., 2011. "The evolving renminbi regime and implications for Asian currency stability," Journal of the Japanese and International Economies, Elsevier, vol. 25(1), pages 23-38, March.
    6. THORBECKE, Willem, 2009. "Can East Asia be an Engine of Growth for the World Economy?," Discussion papers 09006, Research Institute of Economy, Trade and Industry (RIETI).
    7. Shujiro Urata & Toshiyuki Matsuura & Yuhong Wei, 2006. "International Intrafirm Transfer of Management Technology by Japanese Multinational Corporations," Discussion papers 06006, Research Institute of Economy, Trade and Industry (RIETI).
    8. Guillaume Gaulier & Françoise Lemoine & Deniz Ünal, 2011. "China's Foreign Trade in the Perspective of a More Balanced Economic Growth," Working Papers 2011-03, CEPII research center.
    9. repec:cii:cepill:2010-307 is not listed on IDEAS
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    More about this item


    exchange rate policy; Monetary cooperation; financial cooperation; Republic of Korea; East Asia;

    JEL classification:

    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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