This book provides a comprehensive overview of the current state of discussion on monetary and financial integration in East Asia. It assesses the steps already taken toward financial integration, and advances different proposals for future exchange rate arrangements in what has now become the world's most dynamic region. Leading scholars evaluate the economic and political arguments, and explore how and to what extent the countries of the region can integrate despite their heterogeneity and underlying political tensions. Drawing on the European experiences, this book analyzes the economic logic of monetary and financial integration in East Asia and its political feasibility.
Foreword by Richard N. Cooper
Introduction Prospects for monetary and financial integration in East Asia - dreams and dilemmas by Koichi Hamada and Beate Reszat and Ulrich Volz 1
Pt. I The Political Economy of Regional Integration
1 The ASEAN economic community and the European experience by Michael G. Plummer and Reid W. Click 13
2 The political economy of European economic and monetary union negotiations and implications for East Asia by Heungchong Kim 41
3 International political conflicts and economic integration by Koichi Hamada and Inpyo Lee 61
Pt. II Developing Bond Markets in East Asia
4 Learning by doing in market reform: lessons from a regional bond fund by Guonan Ma and Eli Remolona 87
5 Currency denomination in Asian bond markets by Eiji Ogawa and Junko Shimizu 104
Pt. III Exchange Rate Policies in East Asia: The Role of the Dollar
6 East Asia's role in the revived Bretton Woods system by Michael P. Dooley and David Folkerts-Landau and Peter Garber 141
7 Current account surpluses and conflicted virtue in East Asia: China and Japan under the dollar standard by Ronald McKinnon and Gunther Schnabl 159
Pt. IV Toward Monetary Integration in East Asia?
8 Three cases for monetary integration in East Asia by Ulrich Volz 195
9 Monetary and exchange rate policy coordination in ASEAN+1 by William H. Branson and Conor N. Healy 222
Pt. V Currency Baskets for East Asia?
10 Capital markets and exchange rate stabilization in East Asia: diversifying risk based on currency baskets by Gunther Schnabl 267
11 Asian currency baskets by John Williamson 290
12 The role of an Asian currency unit by Masahiro Kawai 304