Exchange Rate Regimes in the Asia-Pacific Region and the Global Financial Crisis
Rising economic integration in Asia and periodic volatility in global and national financial markets raise the issue of the optimal degree and form of monetary cooperation among Asian economies. There is a large literature on the benefits and costs of monetary cooperation, however, less can be found with a specific focus on Asia. A number of studies have explored whether Asia might form an optimal currency area, although these have focused on the nature of shocks, in particular business cycle correlations, as well as the extent of trade linkages among economies. Less has been done on the impact of portfolio shifts and financial shocks, and how these shocks impact on financial cooperation. This paper has two goals. The first is to explore the impacts of the current global financial crisis on Asian economies under existing monetary and exchange rate arrangements. The second is to explore how alternative forms of cooperation and exchange rate regimes might change the economic outcomes in Asia. In particular, the paper explores the impact of current regimes compared to one of three hypothetical regimes: (i) all countries peg to the US dollar, (ii) all Asian economies are in an Asian Currency Union with an Asian Central Bank setting policy, or (iii) floating exchange rates with each central bank in Asia independently choosing optimal time-consistent, close-loop policy rules to target a loss function consisting of deviation in inflation and output growth from desired levels.
|Date of creation:||01 Oct 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Fax: (63-2) 636-2648
Web page: http://www.adb.org
More information through EDIRC
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.:
- Soyoung Kim & Jong‐Wha Lee, 2012.
"Real and Financial Integration in East Asia,"
Review of International Economics,
Wiley Blackwell, vol. 20(2), pages 332-349, 05.
- Lee, Chee Sung & Park, Cyn-Young, 2009. "Beyond the Crisis: Financial Regulatory Reform in Emerging Asia," Working Papers on Regional Economic Integration 34, Asian Development Bank.
- Lee, Jong-Wha & Park, Cyn-Young, 2008. "Global Financial Turmoil: Impact and Challenges for Asia's Financial Systems," Working Papers on Regional Economic Integration 18, Asian Development Bank.
- Schou-Zibell, Lotte & Wells, Stephen, 2008. "India's Bond Market-Developments and Challenges Ahead," Working Papers on Regional Economic Integration 22, Asian Development Bank.
- Menon, Jayant, 2008. "Cambodia's Persistent Dollarization: Causes and Policy Options," Working Papers on Regional Economic Integration 19, Asian Development Bank.
- Malcom Dowling & Ganeshan Wignaraja, 2006.
"Central Asia after fifteen years of transition: growth, regional cooperation, and policy choices,"
Asia-Pacific Development Journal,
United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 13(2), pages 113-144, December.
- Dowling, Malcolm & Wignaraja, Ganeshan, 2006. "Central Asia after Fifteen Years of Transition: Growth, Regional Cooperation, and Policy Choices," Working Papers on Regional Economic Integration 3, Asian Development Bank.
- Qin, Duo & Cagas, Marie Anne & Ducanes, Geoffrey & Magtibay-Ramos, Nedelyn & Quising, Pilipinas F., 2007. "Measuring Regional Market Integration in Developing Asia: a Dynamic Factor Error Correction Model (DF-ECM) Approach," Working Papers on Regional Economic Integration 8, Asian Development Bank.
- Menon, Jayant & Melendez-Nakamura, Anna, 2009. "Aging in Asia: Trends,Impacts and Responses," Working Papers on Regional Economic Integration 25, Asian Development Bank.
- Menon, Jayant, 2009. "Managing Success in Viet Nam: Macroeconomic Consequences of Large Capital Inflows with Limited Policy Tools," Working Papers on Regional Economic Integration 27, Asian Development Bank.
- Lee, Jong-Wha & Pyun, Ju Hyun, 2009.
"Does Trade Integration Contribute to Peace?,"
Working Papers on Regional Economic Integration
24, Asian Development Bank.
- Kawai, Masahiro & Wignaraja, Ganeshan, 2008. "Regionalism as an Engine of Multilateralism: A Case for a Single East Asian FTA," Working Papers on Regional Economic Integration 14, Asian Development Bank.
- Soyoung Kim & Jong‐Wha Lee & Cyn‐Young Park, 2011.
"Emerging Asia: Decoupling or Recoupling,"
The World Economy,
Wiley Blackwell, vol. 34(1), pages 23-53, 01.
- Michael G. Plummer, 2007.
"The Post-Crisis Sequencing of Economic Integration in Asia: Trade as a Complement to a Monetary Future,"
Working Paper Series
12-07, The Rimini Centre for Economic Analysis, revised Jul 2007.
- Michael G. Plummer & Ganeshan Wignaraja, 2006. "The Post-Crisis Sequencing of Economic Integration in Asia: Trade as a Complement to a Monetary Future," Economie Internationale, CEPII research center, issue 107, pages 59-85.
- Plummer, Michael G. & Wignaraja, Ganeshan, 2007. "The Post-Crisis Sequencing of Economic Integration in Asia: Trade as a Complement to a Monetary Future," Working Papers on Regional Economic Integration 9, Asian Development Bank.
- Park, Donghyun & Park, Innwon & Estrada, Gemma Esther B., 2008. "Is the ASEAN-Korea Free Trade Area (AKFTA) an Optimal Free Trade Area?," Working Papers on Regional Economic Integration 21, Asian Development Bank.
- Plummer, Michael G., 2006. "Toward Win-Win Regionalism in Asia: Issues and Challenges in Forming Efficient Trade Agreements," Working Papers on Regional Economic Integration 5, Asian Development Bank.
- Kim, Soyoung & Yang, Doo Yong, 2008. "The Impact of Capital Inflows on Emerging East Asian Economies: Is Too Much Money Chasing Too Little Good?," Working Papers on Regional Economic Integration 15, Asian Development Bank.
- Capannelli, Giovanni & Lee, Jong-Wha & Petri, Peter, 2009. "Developing Indicators for Regional Economic Integration and Cooperation," Working Papers on Regional Economic Integration 33, Asian Development Bank.
- Lejot , Paul & Arner, Douglas & Schou-Zibell, Lotte, 2008. "Securitization in East Asia," Working Papers on Regional Economic Integration 12, Asian Development Bank.
When requesting a correction, please mention this item's handle: RePEc:ris:adbrei:0036. 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: (Ivan B. de Leon)
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.