The failure of the dollar peg to prevent the Asian currency crisis of 1997 to 1998 has highlighted the importance of the exchange rate regime in Asia and provoked much discussion as to what the alternatives are in terms of exchange rate systems.
Bringing together extensive research on Asian basket currencies in one volume, this new text discusses whether a currency basket system is the answer, striking a balance between the theoretical and empirical. With strong policy implications for East Asia, the impressive team of contributors argue that for countries that have close economic relationships with several currency areas, it is well worth considering a currency basket system. The book also pursues the important idea of coordination failure, whereby if each individual country tries to adopt an optimal exchange rate given other neighbouring countries' policies, they may collectively fail to reach a region's optimal exchange rate regime.
A Basket Currency for Asia is a topical and significant text that will appeal to students and scholars of international finance and Asian economics.
Table of Contents
1. Introduction Takatoshi Ito and Eiji Ogawa 2. How Did the Dollar Peg Fail in Asia? (reprint of JJIE, December 1998) Takatoshi Ito, Eiji Ogawa and Yuri Sasaki 3. Post-Crisis Exchange Rate Regimes in East Asia Shinichi Fukuda 4. On the Desirability of a Regional Basket Currency Arrangement (expanded version of JJIE, 2002) Eiji Ogawa and Takatoshi Ito 5. Economic Interdependence and International Coordination in East Asia Eiji Ogawa 6. A Case for a Coordinated Basket for Asian Countries Takatoshi Ito 7. A Common Currency Basket in Bond Markets in East Asia Eiji Ogawa and Junko Shimizu 8. Possibilities for the Introduction of a Common Currency Basket in East Asia, from an OCA Standpoint Eiji Ogawa and Kentaro Kawasaki
Takatoshi Ito is Professor in the Graduate School of Economics and the Graduate School of Public Policy at the University of Tokyo, Japan.