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Does Europe's path to monetary union provide lessons for East Asia?

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  • Reuven Glick

Abstract

In 1999, eleven European countries adopted the euro as their common currency (Greece followed in 2001). This followed a long period of gradually tying their national currencies together more tightly by limiting exchange rate fluctuations among member countries, culminating in the European Monetary Union (EMU). The experience of Europe has raised the question as to whether countries in other regions of the world can and should follow a similar path towards adopting a common currency. ; East Asia, with some of the most dynamically growing economies in the world, has long been considered a possible candidate for a regional monetary union. This Economic Letter addresses three questions that help frame the issue. First, is it desirable for East Asia to adopt a common currency like the euro? Second, does Europe's experience provide any lessons for East Asia about how to attain a common currency? Third, how does the economic integration path that East Asia is now following differ from the path Europe followed?

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  • 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.
    • Handle: RePEc:fip:fedfel:y:2005:i:aug12:n:2005-19
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    References listed on IDEAS

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    1. Tamim Bayoumi and Barry Eichengreen., 1993. "One Money or Many? On Analyzing the Prospects for Monetary Unification in Various Parts of the World," Center for International and Development Economics Research (CIDER) Working Papers C93-030, University of California at Berkeley.
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    Cited by:

    1. 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.
    2. 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.
    3. Willett, Thomas D. & Srisorn, Nancy, 2014. "The political economy of the Euro crisis: Cognitive biases, faulty mental models, and time inconsistency," Journal of Economics and Business, Elsevier, vol. 76(C), pages 39-54.
    4. 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.

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    Keywords

    monetary unions; East Asia;

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