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Prospects for Asian Monetary Cooperation After the Asian Financial Crisis. Pipedream or Possible Reality?

Author

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  • Wilson, Peter

    (National University of Singapore)

Abstract

This paper re-assesses the prospects for greater monetary integration in Asia in the wake of the Asian financial crisis of 1997. The Asian crisis highlighted the absence of well-developed supranational institutions in Asia to provide early warning signals of impending currency or balance of payments problems, access to unconditional funds to cope with financial problems, and a common defensive mechanism to deal with speculative movements in exchange rates. Since 1997 there have been a number of initiatives to enhance monetary cooperation in the region including a Japanese proposal for an Asian Monetary Fund, the Chiang Mai Initiative at the Asean+3 meeting in May 2000, the Kobe Research Project, and the currency swap agreements and surveillance machinery initiated at the Asian Development Bank Meeting in Honolulu in May 2001. We find that whilst a common monetary and exchange rate policy in EA is unlikely in the foreseeable future, until the net economic benefits of giving up unilateral exchange rate regimes are more apparent, a good case can be made for placing responsibility for the functions of macroeconomic surveillance and regional resource pooling within a permanent institution which could evolve over time into a fully-fledged Asian Monetary Fund with its own Asia-specific rules on conditionality.

Suggested Citation

  • Wilson, Peter, 2002. "Prospects for Asian Monetary Cooperation After the Asian Financial Crisis. Pipedream or Possible Reality?," EIJS Working Paper Series 151, Stockholm School of Economics, The European Institute of Japanese Studies.
  • Handle: RePEc:hhs:eijswp:0151
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    File URL: http://swopec.hhs.se/eijswp/papers/eijswp0151.pdf
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    References listed on IDEAS

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    Cited by:

    1. Hsiao Chink Tang, 2006. "An Asian Monetary Union?," CAMA Working Papers 2006-13, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Carlos Cortinhas, 2007. "Intra-industry trade and business cycles in ASEAN," Applied Economics, Taylor & Francis Journals, vol. 39(7), pages 893-902.

    More about this item

    Keywords

    Optimum currency area; Asian Monetary Fund; Exchange rates; ASEAN; Monetary cooperation;

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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