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Asian Monetary Unit (Amu) As A Surveillance Indicators For Regional Monetary Cooperation

Author

Listed:
  • EIJI OGAWA

    (Graduate School of Commerce and Management, Hitotsubashi University, Japan)

  • JUNKO SHIMIZU

    (School of Commerce, Senshu Universitym, Japan)

Abstract

Ogawa and Shimizu (2005) proposed an Asian Monetary Unit (AMU), which is a common currency basket composed of ASEAN plus three Asian currencies, and AMU Deviation Indicators (AMU DIs), which indicates deviations of each Asian currency in terms of the AMU compared to the benchmark rate. In this paper, we use daily and monthly data of AMU and AMU DIs to examine their usefulness as a surveillance indicator for monetary cooperation in Asia. We find that an AMU peg system stabilizes the trade-weighted exchange rates within Asia and that AMU DIs warn of misalignments of and between Asia currencies.

Suggested Citation

  • Eiji Ogawa & Junko Shimizu, 2011. "Asian Monetary Unit (Amu) As A Surveillance Indicators For Regional Monetary Cooperation," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 67-83.
    • Handle: RePEc:wsi:jicepx:v:02:y:2011:i:01:n:s1793993311000221
    DOI: 10.1142/S1793993311000221
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    References listed on IDEAS

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    1. Willem Thorbecke, 2011. "The Effect Of Exchange Rate Changes On Trade In East Asia," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 85-102.
    2. Hyun Song Shin & Masazumi Hattori, 2009. "The Broad Yen Carry Trade," World Scientific Book Chapters, in: Douglas D Evanoff & David S Hoelscher & George G Kaufman (ed.), Globalization And Systemic Risk, chapter 11, pages 169-189, World Scientific Publishing Co. Pte. Ltd..
    3. John Williamson, 2005. "A Currency Basket for East Asia, Not Just China," Policy Briefs PB05-01, Peterson Institute for International Economics.
    4. Jacob Gyntelberg & Mico Loretan & Tientip Subhanij & Eric Chan, 2009. "International portfolio rebalancing and exchange rate fluctuations in Thailand," BIS Working Papers 287, Bank for International Settlements.
    5. OGAWA Eiji & YOSHIMI Taiyo, 2008. "Widening Deviation among East Asian Currencies," Discussion papers 08010, Research Institute of Economy, Trade and Industry (RIETI).
    6. 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.
    7. Junko Shimizu & Eiji Ogawa, 2009. "Stability of East Asian Currencies during the Global Financial Crisis," Global COE Hi-Stat Discussion Paper Series gd09-083, Institute of Economic Research, Hitotsubashi University.
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    More about this item

    Keywords

    Regional monetary cooperation; common currency basket; Asian Monetary Unit (AMU); F31; F33; F36;
    All these keywords.

    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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