Exchange Rate Regimes And Macroeconomic Management In Asia

With the rise of China, India and the re-emergence of East Asia from the financial crisis of 1997–98, monetary issues in Asia have acquired great significance as the region holds the largest reserves in the world and consequently plays a major role in the global macro-economy. In addition, there are also a great variety of monetary policy regimes at play in the region – reflecting each country's needs and policy preferences. This volume explores monetary, exchange rate and macroeconomic policies in Asia. A particular question that is analysed is Asia's experience since the crisis with the use of monetary policy to manage the resurgence in capital inflows. It also examines the theoretical and policy issues associated with international capital flows, the increasing degree of integration of financial markets and exchange rates for emerging Asian economies. The book is unique in focussing on China, India and Southeast Asia, rather than just having a sub-regional or country-specific focus. Rigorous empirical analysis is applied to important practical policy issues. The book also provides accessible overviews of recent research relevant to the questions that are explored and is written throughout in a manner that is accessible to policy makers, students and business/financial journalists.

This important book comprises insightful papers on lessons learned from some major exchange rate and monetary experiences in Asia, exchange rate crisis management in Asia and choice of exchange rate systems in Asia. Originally published in the Singapore Economic Review, Vol. 52, No. 3, 2007, it deals primarily with the exchange rate systems and policies in the three largest economies in Asia: China, Japan and India. It also contains a paper on Singapore''s exchange rate system, whose success could make it a role model for other small open economies. Notable contributors include Ronald McKinnon and John Williamson, among others. The editor is the original designer of China''s latest exchange rate system reform.

The Asian crisis of 1997-1998 was a major influence on macroeconomic thinking concerning exchange rate regimes, the functioning of international institutions, such as the IMF and the World Bank, and international contagion of macroeconomic instability from one country to another. Exchange Rate Regimes and Macroeconomic Stability offers perspectives on these issues from the viewpoints of two Nobel Laureates, an IMF economist, and Asian economists. This book contributes new ideas to the ongoing debate on the role of domestic monetary authorities and international institutions in reducing the likelihood of international financial crises, as well as the problems associated with various exchange rate regimes from the standpoint of macroeconomic stability. Overall, the chapters contained in this volume offer interesting perspectives, which have been stimulated by the recent events in the foreign exchange market. They provide a useful reference for anyone interested in the development of exchange rate regimes, and represent considerable reflection by economists half a century after Bretton Woods.

This book contains papers selected from the 25th Federation of ASEAN Economic Associations Annual Meeting, hosted by the Economic Society of Singapore on 7OCo8 September 2000, in Singapore. East and Southeast Asia had just emerged from the devastation of the Asian currency crisis of 1997OCo8. The theme of the conference was chosen to enable participants to examine macroeconomic policies, particularly fiscal, monetary and exchange rate policies that would enable their countries to sustain economic growth without the trauma of financial and currency crises. Prominent economists Ronald McKinnon (Stanford University) and John Williamson (Institute for International Economics) presented four papers about alternative exchange rate regimes. Representative papers from five countries, viz. Indonesia, Malaysia, South Korea, the Philippines and Singapore, are also included in the volume."

East Asian exchange rates have become a global flashpoint. U.S. policymakers blame artificially low Asian currency values for global imbalances, including America's ballooning current account deficit. The solution, they argue, lies in some combination of greater exchange rate flexibility and the appreciation of Asian currencies against the dollar. Asian officials recognize the need to let their exchange rates rise, but they fear that would hamper growth and cut sharply into the value of their dollar reserves. Toward an East Asian Exchange Rate Regime offers a timely and comprehensive analysis of the resulting debates, drawing on expertise from China, Japan, South Korea, and the United States. The introduction reviews the issues at stake, sketches a variety of proposed exchange rate regimes, and discusses comparisons between East Asia and the West. Subsequent chapters examine the connection between global financial imbalances and East Asian monetary cooperation, China's potential role in regional coordination, the relationship between monetary and trade integration, and different paths toward regional cooperation. Authoritative yet concise, this is an essential primer on East Asian monetary integration. Contributors include Gongpil Choi (Korean Institute of Finance, Federal Reserve Bank of San Francisco), Masahiro Kawai (University of Tokyo, Asian Development Bank), Kwanho Shin (Korea University), Yunjong Wang (SK Institute), Masaru Yoshitomi (RIETI,Tokyo), and Yongding Yu (Chinese Academy of Social Sciences).

Asian economies strengthened their monetary and currency management after the Asian financial crisis of 19971998, and came through the global financial crisis of 20072009 relatively well. Nevertheless, the recent global crisis has presented new challenges. This book develops recommendations for monetary and currency policy in Asian economies aimed at promoting macroeconomic and financial stability in an environment of global economic shocks and volatile capital flows. Monetary and Currency Policy Management in Asia draws lessons from crises and makes concrete macroeconomic policy recommendations aimed at minimizing the impacts of an economic and financial downturn, and setting the stage for an early return to sustainable growth. The focus is on short-term measures related to the cycle. The three main areas addressed are: monetary policy measures, both conventional and unconventional, to achieve both macroeconomic and financial stability; exchange rate policy and foreign exchange reserve management, including the potential for regional cooperation to stabilize currency movements; and ways to ease the constraints on policy resulting from the so-called 'impossible trinity' of fixed exchange rates, open capital accounts and independent monetary policy. This is one of the first books since the global financial crisis to specifically and comprehensively address the implications of the crisis for monetary and currency policy in emerging market economies, especially in Asia. Presenting a broad menu of policy options for financial reform and regulation, the book will be of great interest to finance experts and policymakers in the region as well as academics and researchers of financial and Asian economics as well as economic development.

There is a deepening debate in East Asia about the prospects for common exchange rate arrangements, even including the formation of a common currency in the longer term. This raises a complex set of issues and this volume provides a detailed yet comprehensive examination of key issues in the debate. It looks, for example, at the nature and extent of linkages in East Asia, in terms of trade and foreign investment, finance, labour, and consumption, investment and output. It examines how the exchange rate affects various aspects of economies. And it critically analyzes various proposals for currency regimes for the region, including floating exchange rates, basket pegs, and currency union.