IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Regional Monetary Integration among Developing Countries: New Opportunities for Macroeconomic Stability beyond the Theory of Optimum Currency Areas?

  • Barbara Fritz

    ()

    (Department of Economics and at the Latin American Institute of Freie Universität Berlin)

  • Laurissa Mühlich

    ()

    (Department of Economics and at the Latin American Institute of Freie Universität Berlin)

Registered author(s):

    Optimum Currency Area (OCA) approaches turn to be inadequate in the analysis of the new regional monetary integration schemes that have sprung up among developing and emerging market economies. Instead, in accordance with the concept of ‘original sin’ (Eichengreen et al.) we argue that regional monetary South-South integration schemes that, unlike North-South arrangements, involve none of the international reserve currencies, have specific monetary constraints and implications which need to be duly considered. A first comparative analysis of three cases of monetary South-South cooperation in South Africa (CMA), East Asia (ASEAN) and Latin America (Mercosur) shows that these can indeed provide macroeconomic stability gains but that this strongly depends on the existence of economic hierarchies within these integration schemes.

    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://repec.giga-hamburg.de/pdf/giga_06_wp38_fritz-muehlich.pdf
    Download Restriction: no

    Paper provided by GIGA German Institute of Global and Area Studies in its series GIGA Working Paper Series with number 38.

    as
    in new window

    Length: 29 pages
    Date of creation: Dec 2006
    Date of revision:
    Handle: RePEc:gig:wpaper:38
    Contact details of provider: Postal:
    Neuer Jungfernstieg 21, D-20354 Hamburg

    Phone: +49 (0)40 42825-593
    Fax: +49 (0)40 42825-547
    Web page: http://www.giga-hamburg.de/workingpapers
    Email:


    More information through EDIRC

    Order Information: Email:


    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. Barry Eichengreen, 2000. "Does Mercosur Need a Single Currency?," International Finance 0003006, EconWPA.
    2. Chue, Timothy K. & Cook, David, 2008. "Emerging market exchange rate exposure," Journal of Banking & Finance, Elsevier, vol. 32(7), pages 1349-1362, July.
    3. Andrew Berg & Paolo Mauro & Michael Mussa & Alexander K. Swoboda & Esteban Jadresic & Paul R. Masson, 2000. "Exchange Rate Regimes in an Increasingly Integrated World Economy," IMF Occasional Papers 193, International Monetary Fund.
    4. Leland B. Yeager, 2000. "Exchange Rates between What Sorts of Currencies?," Cato Journal, Cato Journal, Cato Institute, vol. 20(1), Spring/Su.
    5. Mongelli, Francesco Paolo, 2002. "ìNew" Views on the Optimum Currency Area Theory: What is EMU Telling US?," Royal Economic Society Annual Conference 2002 140, Royal Economic Society.
    6. Ronald I. McKinnon, 2004. "Optimum Currency Areas and Key Currencies: Mundell I versus Mundell II," Journal of Common Market Studies, Wiley Blackwell, vol. 42(4), pages 689-715, November.
    7. Philippe Aghion & Philippe Bacchetta & Romain Ranciere & Kenneth Rogoff, 2006. "Exchange Rate Volatility and Productivity Growth: The Role of Financial Development," Working Papers 06.02, Swiss National Bank, Study Center Gerzensee.
    8. William H. Branson & Conor N. Healy, 2006. "Monetary and Exchange Rate Policy Coordination in ASEAN+1," Working Papers 022006, Hong Kong Institute for Monetary Research.
    9. Mehl, Arnaud & Reynaud, Julien, 2005. "The determinants of ‘domestic’ original sin in emerging market economies," Working Paper Series 0560, European Central Bank.
    10. repec:cto:journl:v:20:y:2000:i:1:p:109-113 is not listed on IDEAS
    11. Luis Felipe Céspedes & Roberto Chang & Andrés Velasco, 2004. "Balance Sheets and Exchange Rate Policy," American Economic Review, American Economic Association, vol. 94(4), pages 1183-1193, September.
    12. Schnabl, Gunther, 2005. "International Capital Markets and Informal Dollar Standards in the CIS and East Asia," HWWA Discussion Papers 326, Hamburg Institute of International Economics (HWWA).
    13. Barry Eichengreen & Ricardo Hausmann, 1999. "Exchange rates and financial fragility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 329-368.
    14. Arturo Galindo & Leonardo Leiderman, 2005. "Living with Dollarization and the Route to Dedollarization," IDB Publications (Working Papers) 6690, Inter-American Development Bank.
    15. Philippe AGHION & Philippe BACCHETTA & Abhijit BANERJEE, 1999. "A Simple Model of Monetary Policy and Currency Crises," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9914, Université de Lausanne, Faculté des HEC, DEEP.
    16. Andrew K. Rose & T. D. Stanley, 2005. "A Meta-Analysis of the Effect of Common Currencies on International Trade ," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 347-365, 07.
    17. Mundell, Robert, 2003. "Prospects for an Asian currency area," Journal of Asian Economics, Elsevier, vol. 14(1), pages 1-10, February.
    18. Silvana Tenreyro & Robert J. Barro, 2003. "Economic Effects of Currency Unions," NBER Working Papers 9435, National Bureau of Economic Research, Inc.
    19. Kwanho Shin & Yunjong Wang, 2003. "Monetary Integration Ahead of Trade Integration in East Asia?," ISER Discussion Paper 0572, Institute of Social and Economic Research, Osaka University.
    20. Giancarlo Corsetti & Paolo Pesenti & Nouriel Roubini, 1998. "Paper tigers? A model of the Asian crisis," Research Paper 9822, Federal Reserve Bank of New York.
    21. Arturo J. Galindo & Alejandro Micco & Guillermo Ordoñez, 2002. "Financial Liberalization: Does It Pay to Join the Party?," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2002), pages 231-262, August.
    22. Stanley Fischer, 2001. "Exchange Rate Regimes: Is the Bipolar View Correct?," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 3-24, Spring.
    23. Roberto Chang & Andres Velasco, 1998. "Financial Fragility and the Exchange Rate Regime," NBER Working Papers 6469, National Bureau of Economic Research, Inc.
    24. Michael Sturm & Nikolaus Siegfried, 2005. "Regional monetary integration in the member states of the Gulf Cooperation Council," Occasional Paper Series 31, European Central Bank.
    25. Andrés VELASCO, 2000. "Exchange-Rate Policies For Developing Countries: What Have We Learned? What Do We Still Not Know?," G-24 Discussion Papers 5, United Nations Conference on Trade and Development.
    26. Anthony J. Pellechio & Johan Mathisen, 2006. "Using the Balance Sheet Approach in Surveillance; Framework, Data Sources, and Data Availability," IMF Working Papers 06/100, International Monetary Fund.
    27. Luis J. Álvarez & Ignacio Hernando, 2004. "Price setting behaviour in Spain: stylised facts using consumer price micro data," Working Papers 0422, Banco de España;Working Papers Homepage.
    28. Philippe Aghion & Philippe Bacchetta & Abhijit Banerjee, 2001. "A Corporate Balance-Sheet Approach to Currency Crises," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 01.14, Université de Lausanne, Faculté des HEC, DEEP.
    29. John D. Burger & Francis E. Warnock, 2004. "Foreign participation in local-currency bond markets," International Finance Discussion Papers 794, Board of Governors of the Federal Reserve System (U.S.).
    30. Gongpil Choi & Deok Ryong Yoon, 2005. "A Roadmap for the Asian Exchange Rate Mechanism," Macroeconomics Working Papers 21960, East Asian Bureau of Economic Research.
    31. Alicia Garcia Herrero & Juan Carlos Berganza, 2004. "What Makes Balance Sheet Effects Detrimental For The Country Risk Premium?," International Finance 0408002, EconWPA.
    32. Brad Setser & Nouriel Roubini & Christian Keller & Mark Allen & Christoph B. Rosenberg, 2002. "A Balance Sheet Approach to Financial Crisis," IMF Working Papers 02/210, International Monetary Fund.
    33. Guy Debelle & Miguel A. Savastano & Paul R. Masson & Sunil Sharma, 1998. "Inflation Targeting as a Framework for Monetary Policy," IMF Economic Issues 15, International Monetary Fund.
    34. Guillermo A. Calvo & Carlos A. Vegh, 1999. "Inflation Stabilization and BOP Crises in Developing Countries," NBER Working Papers 6925, National Bureau of Economic Research, Inc.
    35. Sa, S. & Guerin, J., 2006. "Recent developments in monetary and financial integration in Asia," Financial Stability Review, Banque de France, issue 8, pages 111-129, May.
    36. Anastasia Guscina & Olivier Jeanne, 2006. "Government Debt in Emerging Market Countries; A New Data Set," IMF Working Papers 06/98, International Monetary Fund.
    37. Morris Goldstein & Philip Turner, 2004. "Controlling Currency Mismatches in Emerging Markets," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 373.
    Full references (including those not matched with items on IDEAS)

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

    When requesting a correction, please mention this item's handle: RePEc:gig:wpaper:38. 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: (Bert Hoffmann)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.