The Issue of the Exchange Rate Regime in East Asia: Towards a Regional Currency Bloc?

Since the financial crisis of 1997-1998, East Asian countries have developed many initiatives for monetary and financial cooperation. The global crisis that began in 2007 has further accelerated the process of cooperation. The Multilateralization of the Chiang Mai Initiative in May 2010 became the k...

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Bibliographic Details
Published in:Revue d'économie politique 2013-03, Vol.123 (2), p.265-298
Main Authors: Figuiere, Catherine, Guilhot, Laetitia, Guillaumin, Cyriac
Format: Article
Language:fre
Subjects:
Currencies
East Asia
Economic conditions
Economic cooperation
Economic Crises
Economic dependence
Economic theory
Exchange Rate
Exchange rates
Finance
Financial crisis
Foreign exchange rates
Interdependence
International Cooperation
Money
Panel Data
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Summary:Since the financial crisis of 1997-1998, East Asian countries have developed many initiatives for monetary and financial cooperation. The global crisis that began in 2007 has further accelerated the process of cooperation. The Multilateralization of the Chiang Mai Initiative in May 2010 became the key element in establishing an Asian Monetary Fund. This strengthening of institutional integration, coupled with an increased economic interdependence, raises issues regarding the possible creation of a de facto currency bloc in the region. The aim of this paper is to explore this hypothesis using nonstationary panel data. The tools of convergence are translated to the exchange rates and we test, after having defined it, the hypothesis of a currency bloc using the three generations of panel unit root tests. Our results show, firstly, a decoupling of East Asian currencies vis-a-vis the dollar and, secondly, the emergence of a convergence towards regional targets. Adapted from the source document.
ISSN:0373-2630
DOI:10.3917/redp.232.0265