IDEAS home Printed from https://ideas.repec.org/a/eee/ememar/v11y2010i2p152-172.html
   My bibliography  Save this article

How far apart are the two ACUs from each other? Asian currency unit and Asian currency union

Author

Listed:
  • Watanabe, Shingo
  • Ogura, Masanobu

Abstract

We argue the prospects of an Asian currency unit and an Asian currency union with a comprehensive survey of the literature, an empirical analysis and a study of the European Currency Unit's (ECU) experience. Asian countries may meet optimal currency area conditions. However, many other factors along the dimensions of history, politics and economic structure should be addressed for the realization of currency unification. The ECU experience suggests that even a successful Asian currency unit requires firm political commitment and expectations of eventual currency unification.

Suggested Citation

  • Watanabe, Shingo & Ogura, Masanobu, 2010. "How far apart are the two ACUs from each other? Asian currency unit and Asian currency union," Emerging Markets Review, Elsevier, vol. 11(2), pages 152-172, June.
    • Handle: RePEc:eee:ememar:v:11:y:2010:i:2:p:152-172
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1566-0141(10)00009-9
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Charles Wyplosz, 2001. "A Monetary Union in Asia? Some European Lessons," RBA Annual Conference Volume (Discontinued), in: David Gruen & John Simon (ed.),Future Directions for Monetary Policies in East Asia, Reserve Bank of Australia.
    2. 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.
    3. Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-673, September.
    4. Reuven Glick, 2005. "Does Europe's path to monetary union provide lessons for East Asia?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue aug12.
    5. John Williamson, 2005. "A Currency Basket for East Asia, Not Just China," Policy Briefs PB05-01, Peterson Institute for International Economics.
    6. Barry Eichengreen, 2006. "The Parallel-Currency Approach to Asian Monetary Integration," American Economic Review, American Economic Association, vol. 96(2), pages 432-436, May.
    7. Robert N McCauley & Yung-Chul Park, 2006. "Developing the bond market(s) of East Asia: global, regional or national?," BIS Papers chapters, in: Bank for International Settlements (ed.), Asian bond markets: issues and prospects, volume 30, pages 19-39, Bank for International Settlements.
    8. 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.
    9. Barry Eichengreen, 2011. "Out-of-the-Box Thoughts about the International Financial Architecture," Chapters, in: Sylvester Eijffinger & Donato Masciandaro (ed.), Handbook of Central Banking, Financial Regulation and Supervision, chapter 13, Edward Elgar Publishing.
    10. Eiji Ogawa & Kentaro Kawasaki, 2008. "Adopting a Common Currency Basket Arrangement into the ASEAN Plus Three," NBER Chapters, in: International Financial Issues in the Pacific Rim: Global Imbalances, Financial Liberalization, and Exchange Rate Policy, pages 219-237, National Bureau of Economic Research, Inc.
    11. By Norman Loayza & Humberto Lopez & Angel Ubide, 2001. "Comovements and Sectoral Interdependence: Evidence for Latin America, East Asia, and Europe," IMF Staff Papers, Palgrave Macmillan, vol. 48(2), pages 1-7.
    12. 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.
    13. Kwack, Sung Y., 2005. "Exchange rate and monetary regime options for regional cooperation in East Asia," Journal of Asian Economics, Elsevier, vol. 16(1), pages 57-75, February.
    14. Carsten Hefeker & Andreas Nabor, 2005. "China's role in East-Asian monetary integration," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 157-166.
    15. Michael G. Plummer & Reid W. Click, 2005. "Bond market development and integration in ASEAN," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 133-142.
    16. Hali J. Edison, 1986. "Is the ECU an optimal currency basket?," International Finance Discussion Papers 282, Board of Governors of the Federal Reserve System (U.S.).
    17. Mr. Owen Evens & Mr. Thomas H. Mayer & Mr. Philip M Young & Horst Ungerer, 1986. "The European Monetary System: Recent Developments," IMF Occasional Papers 1986/007, International Monetary Fund.
    18. Alberto Alesina & Robert J. Barro & Silvana Tenreyro, 2003. "Optimal Currency Areas," NBER Chapters, in: NBER Macroeconomics Annual 2002, Volume 17, pages 301-356, National Bureau of Economic Research, Inc.
    19. Barry Eichengreen, 2006. "The development of Asian bond markets," BIS Papers chapters, in: Bank for International Settlements (ed.), Asian bond markets: issues and prospects, volume 30, pages 1-12, Bank for International Settlements.
    20. Zhaoyong Zhang & Kiyotaka Sato & Michael McAleer, 2004. "Is a monetary union feasible for East Asia?," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1031-1043.
    21. 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.
    22. Junichi Goto & Koichi Hamada, 1994. "Economic Preconditions for Asian Regional Integration," NBER Chapters, in: Macroeconomic Linkage: Savings, Exchange Rates, and Capital Flows, pages 359-388, National Bureau of Economic Research, Inc.
    23. Ogawa, Eiji & Shimizu, Junko, 2006. "Stabilization of effective exchange rates under common currency basket systems," Journal of the Japanese and International Economies, Elsevier, vol. 20(4), pages 590-611, December.
    24. Takatoshi Ito & Anne O. Krueger, 1994. "Macroeconomic Linkage: Savings, Exchange Rates, and Capital Flows," NBER Books, National Bureau of Economic Research, Inc, number ito_94-1.
    25. John Williamson, 2000. "Exchange Rate Regimes for Emerging Markets: Reviving the Intermediate Option," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa60, April.
    26. Huang, Ying & Guo, Feng, 2006. "Is currency union a feasible option in East Asia?: A multivariate structural VAR approach," Research in International Business and Finance, Elsevier, vol. 20(1), pages 77-94, March.
    27. Eric Girardin, 2004. "Regime-Dependent Synchronization of Growth Cycles between Japan and East Asia," Asian Economic Papers, MIT Press, vol. 3(3), pages 147-176.
    28. Mr. Andrew Berg & Mr. Paolo Mauro & Mr. Michael Mussa & Mr. Alexander K. Swoboda & Mr. Esteban Jadresic & Mr. Paul R Masson, 2000. "Exchange Rate Regimes in an Increasingly Integrated World Economy," IMF Occasional Papers 2000/011, International Monetary Fund.
    29. Ito, Takatoshi & Rose, Andrew K. (ed.), 2008. "International Financial Issues in the Pacific Rim," National Bureau of Economic Research Books, University of Chicago Press, number 9780226386829, September.
    30. David Folkerts-Landau & Peter M. Garber, 1992. "The Private ECU: A Currency Floating on Gossamer Wings," NBER Working Papers 4017, National Bureau of Economic Research, Inc.
    31. 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.
    32. Takatoshi Ito & Andrew K. Rose, 2008. "International Financial Issues in the Pacific Rim: Global Imbalances, Financial Liberalization, and Exchange Rate Policy," NBER Books, National Bureau of Economic Research, Inc, number ito_08-1.
    33. Bayoumi, Tamim & Eichengreen, Barry & Mauro, Paolo, 2000. "On Regional Monetary Arrangements for ASEAN," Journal of the Japanese and International Economies, Elsevier, vol. 14(2), pages 121-148, June.
    34. Chow, Hwee Kwan & Kim, Yoonbai, 2003. "A common currency peg in East Asia? Perspectives from Western Europe," Journal of Macroeconomics, Elsevier, vol. 25(3), pages 331-350, September.
    35. Jong-Wha Lee & Yung Chul Park & Kwanho Shin, 2003. "A Currency Union in East Asia," ISER Discussion Paper 0571, Institute of Social and Economic Research, Osaka University.
    36. repec:cup:cbooks:9780521862509 is not listed on IDEAS
    37. Kenen,Peter B. & Meade,Ellen E., 2008. "Regional Monetary Integration," Cambridge Books, Cambridge University Press, number 9780521711500, September.
    38. Eiji Ogawa & Junko Shimizu, 2006. "Stabilization of Effective Exchange Rates Under Common Currency Basket Systems," NBER Working Papers 12198, National Bureau of Economic Research, Inc.
    39. Barry Eichengreen & Charles Wyplosz, 1993. "The Unstable EMS," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1), pages 51-144.
    40. Clifford R Dammers & Robert N McCauley, 2006. "Basket weaving: the euromarket experience with basket currency bonds," BIS Quarterly Review, Bank for International Settlements, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. de Truchis, Gilles & Keddad, Benjamin, 2013. "Southeast Asian monetary integration: New evidences from fractional cointegration of real exchange rates," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 26(C), pages 394-412.
    2. Agustiar, Memet, 2019. "Indonesia’s Monetary Integration with OIC Member Countries: New Evidence," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 53(1), pages 135-144.

    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. Shingo Watanabe & Masanobu Ogura, 2006. "How Far Apart Are Two ACUs from Each Other? : Asian Currency Unit and Asian Currency Union," Bank of Japan Working Paper Series 06-E-20, Bank of Japan.
    2. Woosik Moon & Yeongseop Rhee, 2012. "Asian Monetary Integration," Books, Edward Elgar Publishing, number 14191.
    3. de Truchis, Gilles & Keddad, Benjamin, 2013. "Southeast Asian monetary integration: New evidences from fractional cointegration of real exchange rates," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 26(C), pages 394-412.
    4. Hyoung‐kyu Chey, 2009. "A Political Economic Critique on the Theory of Optimum Currency Areas, and the Implications for East Asia," The World Economy, Wiley Blackwell, vol. 32(12), pages 1685-1705, December.
    5. 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.
    6. Charles Adams & Hwee Chow, 2009. "Asian Currency Baskets: An Answer in Search of a Question?," Open Economies Review, Springer, vol. 20(3), pages 403-423, July.
    7. Jeon, Bang Nam & Zhang, Hongfang, 2007. "A currency union or an exchange rate union: evidence from Northeast Asia," MPRA Paper 36622, University Library of Munich, Germany, revised 01 Feb 2012.
    8. Genberg, Hans & Siklos, Pierre L., 2010. "Revisiting the shocking aspects of Asian monetary unification," Journal of Asian Economics, Elsevier, vol. 21(5), pages 445-455, October.
    9. Hsiufen Hsu, 2009. "Is a common currency area feasible for East Asia? A multivariate structural VAR approach," OSIPP Discussion Paper 09E006, Osaka School of International Public Policy, Osaka University.
    10. Kwack, Sung Y., 2005. "Exchange rate and monetary regime options for regional cooperation in East Asia," Journal of Asian Economics, Elsevier, vol. 16(1), pages 57-75, February.
    11. Peter B. Kenen & Ellen E. Meade, 2006. "Monetary integration in East Asia," Proceedings, Federal Reserve Bank of San Francisco, issue Jun.
    12. 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.
    13. Eiji Ogawa & Kentaro Kawasaki, 2011. "Monetary Integration in East Asia," Chapters, in: Masahisa Fujita & Ikuo Kuroiwa & Satoru Kumagai (ed.), The Economics of East Asian Integration, chapter 10, Edward Elgar Publishing.
    14. 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.
    15. Abhijit Sen Gupta & Amitendu Palit, 2008. "Feasibility of an Asian Currency Unit," Macroeconomics Working Papers 22164, East Asian Bureau of Economic Research.
    16. Benjamin Keddad, 2013. "Assessing Asian Exchange Rates Coordination under Regional Currency Basket System," AMSE Working Papers 1345, Aix-Marseille School of Economics, France, revised Sep 2013.
    17. Lee, Grace H.Y. & Azali, M., 2012. "Is East Asia an optimum currency area?," Economic Modelling, Elsevier, vol. 29(2), pages 87-95.
    18. Click, Reid W., 2009. "The ASEAN dollar standard in the post-crisis era: A reconsideration," Journal of Asian Economics, Elsevier, vol. 20(3), pages 269-279, May.
    19. Md. Abdur Rahman Forhad, 2014. "How many currencies in Saarc countries? a multivariate structural var approach," Journal of Developing Areas, Tennessee State University, College of Business, vol. 48(4), pages 265-286, October-D.
    20. Kawai, Masahiro, 2005. "East Asian economic regionalism: progress and challenges," Journal of Asian Economics, Elsevier, vol. 16(1), pages 29-55, February.

    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:eee:ememar:v:11:y:2010:i:2:p:152-172. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620356 .

    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.