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Adjustments of Capital Account Restrictions and Exchange Rate Regimes in East Asia

Author

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  • Naoyuki Yoshino

    (Asian Development Bank Institute, Kasumigaseki Building 8F 3-2-5, Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan)

  • Sahoko Kaji

    (Department of Economics, Keio University, 2-15-45 Mita, Minato-ku, Tokyo 108-8345, Japan)

  • Tamon Asonuma

    (Debt Policy Division, Strategy Policy and Review Department, International Monetary Fund, 700 19th Street, N.W. Washington D.C. 20431, USA)

Abstract

This paper discusses adjustments of capital account restrictions and exchange rate regimes in East Asia. Monetary authorities have two options for these adjustments: Gradual adjustments and rapid adjustments. We analyze the costs and benefits for both adjustment options in each area, i.e., capital account restrictions and exchange rate regimes. The paper provides prominent country cases for each adjustment option to emphasize the benefits for policymakers. We then propose four transition policy options for East Asian countries aiming to relax capital account restrictions and increase flexibility in exchange rates from fixed regimes with capital account controls.

Suggested Citation

  • Naoyuki Yoshino & Sahoko Kaji & Tamon Asonuma, 2015. "Adjustments of Capital Account Restrictions and Exchange Rate Regimes in East Asia," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(03), pages 1-32.
    • Handle: RePEc:wsi:jicepx:v:06:y:2015:i:03:n:s1793993315500155
    DOI: 10.1142/S1793993315500155
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    Cited by:

    1. Naoyuki Yoshino & Sahoko Kaji & Tamon Asonuma, 2015. "Dynamic Analysis of the Exchange Rate Regime: Policy Implications for Emerging Countries in East Asia," Review of Development Economics, Wiley Blackwell, vol. 19(3), pages 624-637, August.
    2. Naoyuki Yoshino & Sahoko Kaji & Tamon Asonuma, 2016. "Dynamic Effects of Changes in the Exchange Rate System," Asian Development Review, MIT Press, vol. 33(1), pages 111-161, March.

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    More about this item

    Keywords

    Adjustments of capital account; capital controls; exchange rate adjustments; exchange rate regimes; transition policy; East Asia; F33; F41; F42;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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