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Prospects for a Single Asian Currency

Author

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  • Abhijit Sen Gupta

    (Associate Professor, Centre for International Trade and Development, School of International Studies, Jawaharlal Nehru University)

Abstract

This paper evaluates the prospects for greater exchange rate coordination amongst Asian countries. This would help in fostering greater trade and investment linkages within the region and diversification of the reserve currency away from the US Dollar, both of which would shelter Asian economies from events like the recent financial crisis in the future. The paper constructs an hypothetical Asian Currency Unit to evaluate the degree of exchange rate coordination amongst the member countries, and finds that the participating countries have displayed disparate movements against the ACU, indicating the varied objectives of the policymakers. The paper also evaluates role of some of the regional initiatives in encouraging financial and monetary cooperation, and concludes that while these initiatives are extremely important, they need to be significantly strengthened in a world of rapidly changing global financial architecture.

Suggested Citation

  • Abhijit Sen Gupta, 2010. "Prospects for a Single Asian Currency," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 6(5), pages 873-892, June.
    • Handle: RePEc:mof:journl:ppr011f
    as

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    File URL: http://warp.ndl.go.jp/info:ndljp/pid/9908001/www.mof.go.jp/english/pri/publication/pp_review/ppr011/ppr011f.pdf
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    References listed on IDEAS

    as
    1. Emmanuel Farhi & Ricardo Caballero & Pierre-Olivier Gourinchas, "undated". "Financial Crash, Commodity Prices and Global Imbalances," Working Paper 20933, Harvard University OpenScholar.
    2. Haruhiko Kuroda & Masahiro Kawai, 2002. "Strengthening Regional Financial Cooperation in East Asia," Asia Pacific Economic Papers 332, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    3. 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.
    4. 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.
    5. Ricardo J. Caballero & Arvind Krishnamurthy, 2009. "Global Imbalances and Financial Fragility," American Economic Review, American Economic Association, vol. 99(2), pages 584-588, May.
    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. repec:cup:cbooks:9780521862509 is not listed on IDEAS
    8. Kenen,Peter B. & Meade,Ellen E., 2008. "Regional Monetary Integration," Cambridge Books, Cambridge University Press, number 9780521711500, September.
    9. Guonan Ma & Eli M Remolona, 2005. "Opening markets through a regional bond fund: lessons from ABF2," BIS Quarterly Review, Bank for International Settlements, June.
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    Cited by:

    1. Paluku Kazimoto, 2014. "The Role of Single currency for Countries Economic Development: a Case Study of the East African Community," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 136-143, April.

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    More about this item

    Keywords

    Financial crisis; Common Currency Area; Asian Integration;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications

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