International Economics

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	Asian Monetary Cooperation
	China's acession to the World Trade Organization (WTO)
	Conditionality (of international donation and loans)
	Covered and Uncovered Interest Parities
	Crises
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	Exchange Rate Arrangements
	Financial liberalization
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Asian Monetary Cooperation

Links | References

What is monetary cooperation?
With the rapid development of international trade and international investment (including direct investment, portfolio investment and bank lending), economies of different countries are increasingly integrated. Therefore, financial crises occurring in one country tend to be more globally (regionally) contagious than before and thus possibly cause more economic turmoil to the regions.

Monetary cooperation is the cooperation among monetary authorities of different countries, often through forums, to prevent and cure the monetary problems among them, thus help stabilize further economic growth.
In the academic aspect, there are studies revealing the reasons of Asian financial crisis and suggesting monetary cooperation as an effective way to prevent further financial crises in this region. An example of such studies is Oh (2000). In fact, before the financial crisis, Agnes (1997) had pointed out the lack of monetary cooperation in Asia

What are the forms of monetary cooperation?
There are various forms for monetary cooperation. First, information exchange concerning central bank functioning is the cooperation form with the lowest degree of integration. Then, there are policy cooperation at macro level, resource provision, banking supervision and financial regulation. Finally, monetary union or monetary integration is the highest integrated form of monetary cooperation, which involves a common currency, common fiscal policies, and common foreign exchange arrangements in the region. The European Monetary Union is an example of monetary union.

The history of Asian monetary cooperation
The beginning of Asian monetary cooperation may be traced to late 1950s, when discussions of SEANZA (South East Asia, New Zealand and Australia), a forum of central banks, focused mainly at providing training for central bankers. SEACEN (Southeast Asian Central Banks), a central bank forum founded in 1966, also focused on such training and research.

The Executives' Meeting of East Asia Pacific Central Banks (EMEAP) was established in 1991. Since then, it has evolved into the most active forum for central banking discussions. In 1996, EMEAP established two working groups and a study group to share knowledge and expertise on financial market cooperation, central bank operations, and banking supervision issues, respectively. One current focus of EMEAP is Asian monetary cooperation.

The 1997 Asian financial crisis drew great attention to further progress of monetary cooperation. The second EMEAP Governors' meeting in 1997 paved the way for a later meeting organized by IMF, when more than US$10 billion out of a package of US$17 facility to Thailand was amassed from EMEAP members.

In November 1999, the ASEAN+3 (Association of Southeast Asian Nations, namely ASEAN, and China, Japan, and Korea) made a formal Joint Statement on East Asia Cooperation. This statement led to the Chiang Mai Initiative in May 2000. The Initiative states to establish an ASEAN Swap Arrangement that includes all ASEAN members and to augment the ASEAN Swap Arrangement by a net work of bilateral swap and repurchase arrangements among ASEAN countries, China, Japan and Korea. These mechanisms aim to provide liquidity support to members in the event of temporary balance of payment difficulties.

Is an Asian currency area appropriate at present?
There are a number of advantages for a regional common currency. In a regional currency area, it is no longer necessary to change the domestic currency into a foreign currency. Transaction costs can be reduced in international trades and investments. Furthermore, the foreign exchange risks caused by fluctuations in relative currency values can be circumvented within the region.

However, to establish an Asian currency area implies to establish a monetary union and to implement similar fiscal and monetary policies in different countries. The great diversity in both economic system and politic institutions among Asian countries makes an Asian currency area not practical at the time being.

Differences in basic economic structures may cause asymmetry of shocks to different countries, which in turn causes some countries' reluctance to participate in the monetary integration. Then, monetary union can only be achieved among countries with similar economic and political backgrounds. However, the Asian economies are largely different in their development stages and financial structures. This variety causes difficulty in working out the procedures that would benefit all the countries.

On the basis of comparisons of macro-economic index, intra-regional trade and financial dependency in Asia with those of EU, Kim and Igawa (2000) analyzed the possibility of an Asian currency area. They suggested that the Asian monetary cooperation adopt voluntary rather than persuasive participation and that the cooperation start from a weak form to a tighter form. Simiar comparisons were also made in Masson and Pattillo (2001), which study relevant effects of a West African monetary union. Kondo (2000) revealed the possible difficulties in forming the political will for Asian monetary integration, while suggesting the proposed common currency unit to consist of a basket of five currencies: the US dollar, Japanese yen, Chinese yuan, South Korean won, and Thai baht.

What are the current focuses of Asian monetary cooperation?
Because large diversity exists in the economic development stages of different countries, a common Asian currency is not practical at least at present. Asian monetary cooperation is currently focused on the prevention of future financial crises and construction of the rescue mechanism should another crisis occur. The emphases are:

Exchange of economic information and best practices.
Regional training in finance and macroeconomics to upgrade the quality of both economic research and macro and financial management.
Arrangements to ensure exchange rate stability and improved regional surveillance.

Pros and cons of the proposed Asian Monetary Fund
As early as in the Asian financial crisis in 1997, Japan proposed to establish a regional institution, the Asian Monetary Fund (AMF), to implement surveillance and regional self-helping practices in the face of financial turmoil. However, this proposal was rejected by the United States and the IMF, on the ground that such an organization would just overlap the IMF's tasks in this region. In addition, an AMF may cause "moral hazard" of profligacy in individual governments since regional bailouts would be more easily available through the AMF.

Recently, the discussion of an AMF has regained some new strength, partially because IMF's bailouts to some countries have failed to achieve the presumed results. Proponents of the AMF argue that the former rejection it gets may due to some political factors, such as unwillingness of the United States to reinforce the economic power of Japan and the organization's inevitable involvement in the China-Taiwan issue. In their opinion, an AMF would have sufficient resources for rescue and would possess better expertise of regional surveillance than IMF does. Since the European monetary integration coexists smoothly with IMF, there is no reason for declining an AMF.

One relevant study is Goad (2000), which implied that the de facto obstacles against the establishment of AMF lie in determining the leading country in this organization. The superpower would allow neither its big competitor Japan nor the socialist country China to head the discussion of Asian financial affairs. On the other hand, by circumventing the political issues that would be inevitably encountered by the Asian Monetary Fund, the present ASEAN+3 is an appropriate framework to discuss Asian monetary cooperation topics. The Chiang Mai Initiative is in fact a significant step in building such a framework.

About the Yen Bloc
Yen Bloc refers to a grouping of countries that use the yen as an international currency and maintain stable exchange rates against the yen.

From 1960s to mid 1980s, Asian economic development had benefited a lot from their relations with the United States. A significant part of exports from the Asian countries is to the United States. In addition, the stable political situations and steady economic development in the United States provided strong supports for the creditworthiness of US dollar. Most local currencies in Asia were linked to the US dollar. Asia was in a de facto dollar bloc.

Suggestions to build a Yen Bloc were firstly spurred in early 1990s, in light of great changes in Asia economies. The weight of exports to the United States in the total Asian exports has decreased significantly since middle 1980s, as the intra-regional trade increases rapidly. On the other hand, the economic influence of Japan in this region has expanded through its trades and investments in the region. Asia still needs an international currency to reduce transaction costs and foreign exchange risks in its regional trades and investments. However, it is better for Japanese yen, rather than US dollar, to assume this duty. Furthermore, Bain (1999) argues that the business cycle of Asia has tended to move in line with that of Japan. The slowdown of exports before the Asia financial crisis could have been muted if these currencies had been linked to the yen.

The biggest obstacle against a yen bloc lies in the fear of Japan's possible hegemony in the economies of Asian. The fluctuations of most Asian currencies against the Japanese yen also pose difficulties in forming a yen bloc. Through an analyses of symmetry of shocks in the region, Gary et. al. (2000) argue that the yen bloc is not appropriate at present. While Kwan (2000) suggest that the local currencies of Asian first peg to a basket of currencies in which the Japanese yen takes a substantial weight. This procedure would finally pave the way for a Yen Bloc.

Keywords: Asian Financial Crisis, Monetary Policy, Asia

Links
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Links related to Asian Financial Crisis (5 out of 41 links are shown. Complete list of links can be found at here.)

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	The Asian Financial Crisis: How and Why it Happened
	URL: http://www.glocom.org/debates/199810_inauguration/anon.html
	Provided by the Global Communications Platform from Japan. A short articles about the cause and consequence of the Asian Financial Crisis.
	3814 visits has been made through our site.

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	Singapore Monetary Authority
	URL: http://www.mas.gov.sg/

	3353 visits has been made through our site.

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	Economics Interactive Tutorials List
	URL: http://hadm.sph.sc.edu/Courses/Econ/Tutorials.html
	Samuel Baker, Associate Professor in the Department of Health Administration at the University of South Carolina, has developed a series of interactive economics tutorials. The tutorials are at the level of introductory microeconomics. Lecture topics cover: demand, supply, elasticity, market equilibrium, costs,discounting, and internal rate of return. Each tutorial features Java based interactive questions and examples. Users receive immediate feedback and hints on their responses to questions.
	3241 visits has been made through our site.

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	Slovakia (National Bank of Slovakia)
	URL: http://www.nbs.sk/INDEXA.HTM
	With Slovak and English version.
	2482 visits has been made through our site.

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	Taiwan Stock Exchange Corporation
	URL: http://www.tse.com.tw/
	Taiwan Stock Exchange's aim is to maintain a fair, open and safe trading market; and to provide innovative, efficient and superior services. This site is with Chinese and English version.
	2338 visits has been made through our site.

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Links related to Monetary Policy (5 out of 34 links are shown. Complete list of links can be found at here.)

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	Singapore Monetary Authority
	URL: http://www.mas.gov.sg/

	3353 visits has been made through our site.

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	Federal Reserve Bank of New York, New York Fed, FRBNY
	URL: http://www.ny.frb.org/
	The Federal Reserve Bank of New York is one of twelve regional Federal Reserve Banks across the U.S. that, together with the Board of Governors in Washington, D.C., serve as te nations's central bank. The Federal Reserve System formulates monetary policy, regulates bank holding companies and state-chartered member banks, and provides banking services to financial institutions and the U.S. government.
	2677 visits has been made through our site.

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	Federal Reserve Bank of Cleveland
	URL: http://www.clev.frb.org/
	The Federal Reserve Bank of Cleveland is one of twelve Reserve Banks across the U.S. that together with the Board of Governors in Washington, D.C., serve as the nation's central bank. The Federal Reserve System formulates monetary policy, regulates bank holding companies and state-chartered member banks, and provides banking services to financial institutions and the U.S. government.
	2408 visits has been made through our site.

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	Taiwan Stock Exchange Corporation
	URL: http://www.tse.com.tw/
	Taiwan Stock Exchange's aim is to maintain a fair, open and safe trading market; and to provide innovative, efficient and superior services. This site is with Chinese and English version.
	2338 visits has been made through our site.

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	Mitsubishi Research Institute
	URL: http://www.mri.co.jp/E/index.html
	It's a private think tank in Japan, there are a lot of analyses about Japanese economy. With Japanese and English version.
	2308 visits has been made through our site.

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Links related to Asia (5 out of 158 links are shown. Complete list of links can be found at here.)

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	Singapore Exchange
	URL: http://www.ses.com.sg/
	Inaugurated on December 1, 1999, Singapore Exchange is the first demutualised, integrated securities and derivatives exchange in Asia Pacific. There are 5 market divisions: Securities Trading, Derivatives Trading, Securities Clearing and Depository, Derivatives Clearing, and the IT Solutions divisions. And the 5 service divisions are: Corporate Strategy and Marketing, Finance and Administration, Human Resources, Information Technology, and Risk Management and Regulation divisions.
	3844 visits has been made through our site.

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	Asian and Global Crisis Homepage. Nouriel Roubini
	URL: http://www.stern.nyu.edu/~nroubini/asia/AsiaHomepage.html
	An introduction to open economy macroeconomics, currency crises & the Asian Crisis, written by Nouriel Roubini.
	3778 visits has been made through our site.

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	Chinese Ministry of Foreign Trade and Economic Cooperation, MOFTEC
	URL: http://www.moftec.gov.cn/
	With Chinese and English version.
	3523 visits has been made through our site.

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	Singapore Monetary Authority
	URL: http://www.mas.gov.sg/

	3353 visits has been made through our site.

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	International Monetary Fund WP99120: Measuring Misalignment - Purchasing Power Parity and East Asian Currencies in the 1990s
	URL: http://www.imf.org/external/pubs/ft/wp/1999/wp99120.pdf
	The concept of purchasing power parity (PPP) is used to evaluate whether eight East Asian currencies were overvalued on the eve of the 1997 crises. The Johansen and Horvath-Watson co-integration test procedures are applied to bilateral and multilateral exchange rates, deflated using CPIs, producer price indices (PPIs), and price indices of export goods. The second deflator yields the greatest evidence of "stationarity". The study find's that the Malaysian, Philippines, and Thai currencies were overvalued, while the Korean and Indonesian were substantially undervalued. Mixed results were obtained for the others. Measures of the equilibrium rate based on time trends in CPI-deflated rates typically suggest larger overvaluations.
	2864 visits has been made through our site.

References
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References related to Asian Financial Crisis (5 references are shown.)

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	East Asian Monetary Cooperation
	Author: Chalongphob Sussangkarn Book: available online at http://www.info.tdri.or.th/chals.pdf
	Year:
	This article gives the necessity of promoting the monetary cooperation in east Asia. The author also provides his supports for the establishment of an Asian Monetary Fund. In addition, he/she suggests the focuses of Asian monetary cooperation.
	Remarks:

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	Causes of the Financial Crisis and the Need of Monetary Cooperation in East Asia
	Author: Oh, Yong Suk Book: Global Economic Review
	Year: 2000 Vol: 29(2), pages 3-23.
	The Main causes of the East Asian financial crisis in 1997-98 can be divided into domestic and foreign ones. The domestic cause stems from structural and liquidity problems, with growing share of non-performing loans in the financial sector, posing as the most visible manifestation of such problems. On the other side, there is the foreign cause, the sudden fall of the yen against the dollar under the region's unstable foreign exchange system and also its over-dependency on the dollar. Unfortunately, these causes have not yet disappeared. In order to prevent another financial economic crisis from recurring and to secure the regional currency stability in the long run, an external safety device is indispensable. The purpose of the East Asian monetary cooperation device is not only to absorb the external shocks caused by abrupt changes in the dollar/yen rate and sudden flow of capital, but also to settle international liquidity problems among the regional countries. If a device for the East Asian monetary cooperation is established, transparency in both financial and physical markets will be augmented and in the process, so will be the stability of financial and physical transactions.
	Remarks:

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	Post-crisis Exchange Rate Policies in East Asia: Options and Challenges
	Author: Nicolas, Francoise Book: Asia-Pacific Journal of Economics and Business
	Year: 2000 Vol: 4(1), pages 4-27.
	This paper highlights the pivotal role of exchange rate policies in the build-up to the recent Asian financial crisis. In the wake of the crisis, some economists have favoured purely floating exchange rates and others have called for the establishment of a currency board. This paper suggests the adoption of some form of managed flexibility, such as a monitoring band. It concludes with an assessment of the rationale and chances for tighter monetary cooperation within the ASEAN region.
	Remarks:

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	Optimal Pegs for Asian Currencies
	Author: Benassy Quere, Agnes Book: CEPII Working Paper
	Year: 1997 Vol: 97/14, pages 25.
	Through cross-country estimations, the authors show that, in contradiction to the behavior of European currencies vis-a-vis the Deutschemark, the relative stability of Asian currencies against the U.S. dollar (until the 1997 crisis) cannot be justified by the theory of optimal currency areas. The analysis developed in the paper relies on the fact that Asian countries do not simply try to stabilize output, as assumed by the theory of optimum currency areas. Because growth heavily relies on the development of exports and on foreign direct investment, monetary authorities seem to stress the stability of the real effective exchange rate as the intermediate target. In such a framework, the authors show that pegging the U.S. dollar is the result of the lack of regional monetary cooperation: each country chooses to peg the U.S. dollar because this is the choice of its Asian partners.
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	The Korean Financial Crisis: Diagnosis, Remedies and Prospects
	Author: Kwon, O. Yul. Book: Journal of the Asia Pacific Economy
	Year: 1998 Vol: 3(3), pages 331-57.
	Pulling down the curtain on its economic miracle of the last three decades, South Korea suddenly fell into a financial crisis in 1997, and was rescued by the IMF. The causes of the crisis are identified in four different sectors of the Korean economy: the real sector, the banking sector, the securities market and the foreign exchange market. Underlying the numerous causes identified for the crisis is the failure of the very institutions and economic structure that propelled Korea to its economic success, in adapting to emerging changes in domestic and international environments. The IMF rescue package is therefore intended to remedy the institutional and structural flaws. The Korean economy is at a crossroads. If it complies well with the IMF conditionality, the economy will be revitalized based on a firmer institutional and structural foundation within a few years. If, however, Korea fails to do so, it will remain an IMF recidivist. Although it has made substantial progress, Korea still faces serious challenges for a successful completion of the IMF programme.
	Remarks:

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References related to Monetary Policy (16 references are shown.)

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	East Asian Monetary Cooperation
	Author: Chalongphob Sussangkarn Book: available online at http://www.info.tdri.or.th/chals.pdf
	Year:
	This article gives the necessity of promoting the monetary cooperation in east Asia. The author also provides his supports for the establishment of an Asian Monetary Fund. In addition, he/she suggests the focuses of Asian monetary cooperation.
	Remarks:

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	Foreign Exchange Intervention, Policy Objectives and Macroeconomic Stability
	Author: Paolo Vitale Book:
	Year: July 2001
	Within a simple model of monetary policy for an open economy, it studies how foreign exchange intervention may be used to condition agents' beliefs of the objectives of the policymakers. Differently from cheap talk foreign exchange intervention guarantees a unique equilibrium. Foreign exchange intervention does not bring about a systematic policy gain, such as an increase in employment or a reduction in the inflationary bias. It can, however, stabilise the national economy, for it drastically reduces the fluctuations of employment and output. Foreign exchange intervention is profitable, but a trade-off exists between these profits and the stability gain it brings about. Finally, an important normative conclusion of our analysis is that foreign exchange intervention and monetary policy should be kept separated, in that a larger stability gain is obtained when these two instruments of policy making are under the control of different governmental agencies.
	Remarks: The full text is downloadable at http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=2886

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	The exchange rate and the MPC: What can we do?
	Author: Sushil Wadhwani Book: Bank of England. Quarterly Bulletin; London
	Year: Aug 2000 Vol: Vol. 40, Iss. 3; pg. 297-306, 10 pgs
	In Sushil Wadhwani's speech (member of the Bank of England's Monetary Policy Committee), he argued that looking only at a two-year ahead inflation forecast when setting interest rates is likely to be suboptimal, and that allowing asset price misalignments to have an additional impact on interest rates could enable a reduction in the volatility of inflation. Currently, sterling is probably overvalued against the euro, and so this might affect the appropriate level of interest rates. He also suggested that, under certain circumstances, sterilized intervention can be effective.
	Remarks: The full text is downloadable at: http://global.umi.com/pqdweb?Did=000000058049040&Fmt=6&Deli=1&Mtd=1&Idx=36&Sid=1&RQT=309&Q=1&IE=x.pdf

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	Is intervention a signal of future monetary policy? Evidence from the federal funds futures market
	Author: Rasmus Fatum and Michael Hutchison; Book: Journal of Money, Credit, and Banking; Columbus;
	Year: Feb 1999 Vol: Vol. 31, Iss. 1; pg. 54, 16 pgs
	Sterilized foreign exchange market intervention may affect the exchange rate if it signals future monetary actions. Signaling will be effective if the central bank backs up intervention with predictable changes in the stance of monetary policy and, in turn, affects current expectations. This paper investigates whether intervention operations in the US are related to changes in expectations over the stance of future monetary policy, where expectations are proxied by federal funds futures rates. This relatively new futures market instrument has proved to be an efficient and unbiased predictor of the future spot federal funds rate. Estimates obtained from a GARCH time-series model over the 1989-1993 period using daily data do not support the signaling hypothesis.
	Remarks: The full text is downloadable at: http://global.umi.com/pqdweb?Did=000000038722171&Fmt=4&Deli=1&Mtd=1&Idx=77&Sid=1&RQT=309

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	Monetary Cooperation in East Asian Countries: A Possibility from Macro Economic Indexes and Intra-regional Trade Dependency
	Author: Kim, Bong Gil; Igawa, Kazuhiro Book: Kobe Economic and Business Review
	Year: 2000 Vol: 0(45), pages 85-101
	This paper analyzes the possibility of currency area in Asia depending on macro-economic indexes and on intra-regional trade dependency, and possibly depending on financial dependency. These will be compared with those in EU. The next issue will be the process to converge into the currency area in Asia. APEC experience might give us much information about these issues. Not persuasive but voluntary participation of member countries in monetary cooperation and starting from weak cooperation to tighter cooperation will be the style in Asia. However it is not solved yet that gradual set-up of currency area is better or easier than rapid introduction of one common currency. All the arguments depend on the authors' speculative perspective that one global currency system is the best final stage of international monetary system and this stage will not be in far future. The authors will discuss the perspective to a global currency area, taking into account of relations with Dollar and Euro and the Asian currency.
	Remarks:

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	Monetary Union in West Africa: An Agency of Restraint for Fiscal Policies?
	Author: Masson, Paul and Pattillo, Catherine Book: IMF Wroking Paper
	Year: 2001 Vol: WP/01/34
	Could a West African monetary union be an effective "agency of restrain" on fiscal olicies? The authors discuss how monetary union could affect fiscal discipline and the arguments for explicit fiscal restraints considered in the European Monetary Union literature, and their applicability to West Africa. The empirical evidence, EMU literature, and CFA experience suggest that monetary union could create the temptation for fiscal profligacy through prospects of a bailout, or costs dluted throughthe membership. Thus,a West African monetary union could promote fiscal discipline only if the hands of the fiscal authorities are also tied by a strong set of fiscal restraints.
	Remarks: One can refer to the West Arrican case when considering the possibility and fiscal effects a proposed currency area in Asia.

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	Post-crisis Exchange Rate Policies in East Asia: Options and Challenges
	Author: Nicolas, Francoise Book: Asia-Pacific Journal of Economics and Business
	Year: 2000 Vol: 4(1), pages 4-27.
	This paper highlights the pivotal role of exchange rate policies in the build-up to the recent Asian financial crisis. In the wake of the crisis, some economists have favoured purely floating exchange rates and others have called for the establishment of a currency board. This paper suggests the adoption of some form of managed flexibility, such as a monitoring band. It concludes with an assessment of the rationale and chances for tighter monetary cooperation within the ASEAN region.
	Remarks:

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	A common currency for the Asia-Pacific
	Author: Kondo, Takehiko Book: Focus Japan
	Year: 2000 Vol: Vol. 27, Iss. 6; pg. 12
	Jacques Attali, once advisor to French President Francois Mitterand and first president of the European Bank for Reconstruction and Development, has suggested that it might be possible to create a single Asian currency centered on the yuan. He is well aware how difficult an undertaking monetary integration is. The formation of the political will necessary for progress toward monetary integration cannot be formed overnight. An Asia-Pacific Common Currency Unit should be created, consisting of a basket of five currencies: the US dollar, Japanese yen, Chinese yuan, South Korean won, and Thai baht.
	Remarks:

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	European Monetary Unification and International Monetary Cooperation
	Author: Barry Eichengreen and Fabio Ghironi Book: Available online at http://econwpa.wustl.edu:8089/eps/it/papers/9804/9804001.pdf
	Year: 1998
	In this paper the authors describe some of the opportunities and perils for international monetary cooperation associated with EMU. Their approach brings together two strands in the literature; one concerned with institutions, the other focusing on policy consensus. Their analysis raises questions about the scope for monetary cooperation in Europe and across the Atlantic. While institutional and intellectual support for monetary-policy coordination within Europe will be further strengthened in Stage III of the transition to EMU, a limitation of that framework concerns relations between the "ins" and the "outs" -- between member states that will and that will not be founding members of the monetary union. While this problem can be remedied, it presently looms as the principal threat to monetary cohesion in Europe and to the broader program of economic and political integration with which the EMU project is linked. By comparison, institutional and intellectual support for transatlantic monetary cooperation, and for G-7 monetary cooperation more generally, remains deficient. The advent of Stage III will only highlight these limitations.
	Remarks:

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	Is Japan Creating a Yen Bloc in East Asia and the Pacific?
	Author: Jeffrey A. Frankel Book: Regionalism and Rivalry: Japan and the US in Pacific Asia, J. Frankel andM. Kahler eds.
	Year: 1993 Vol: November, p. 53
	After examining some of the relevant statistics, this paper argues that the evidence of an volving East Asian trade bloc centered on Japan is not as clear as many believe. Trade between Japan and other Asian countries increased substantially in the late 1980s. But intra-regional trade bias did not increase, as it didi, for example, within the European Community. The phrase "Yen Bloc" could be interpreted as referring to the financial and monetary aspects implicit in the words, rather than to trade flows. The second half of the paper does find evidence of growing Japanese influence in the Pacific via financial and monetary channels, rather than primarily via trade flows. But it does not find evidence that the country has taken deliberate steps to establish a Yen Bloc.
	Remarks: This paper is available online at http://papers.nber.org/papers/W4050

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	Assessing the Economic Preconditions for a Yen Bloc
	Author: Madden, Gary; Savage, Scott; McDonald, Andrew Book: Australian Economic Papers
	Year: 2000 Vol: 39(1),pages 25-32
	Stabilising Asia-Pacific exchange rates by establishing a system of pegs, bands or target zones around the Japanese yen requires the compromise of domestic policy autonomy. The cost of doing so is least when members' reaction to economic shocks are symmetric. This study considers which currencies meet this necessary precondition. To assess regional disturbance symmetry the Blanchard and Quah (1989) procedure is employed to distinguish temporary from permanent shocks for paired aggregate output and price time-series. Disturbance correlations between Japan and other Asia-Pacific nations are calculated. Supply-side disturbance correlations are relatively weak and suggest the economic preconditions for a yen bloc are not in place.
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	The Possibility of Forming a Yen Bloc Revisited
	Author: Kwan, Chi Hung Book: ASEAN Economic Bulletin
	Year: 2000 Vol: 17(2), pages 218-32.
	The latest crisis in Asia has vividly illustrated that the traditional exchange rate policy of pegging to the U.S. dollar can be incompatible with macroeconomic stability in the Asian countries. To insulate themselves from the adverse effect of a widely fluctuating yen-dollar rate, these countries should peg their currencies closer to the Japanese yen by targeting a basket of currencies in which the yen carries a substantial weight. By reducing the foreign exchange risk associated with yen-denominated transactions, this major shift in Asia's exchange rate policy should promote wider use of the yen as a regional currency and capital inflow from Japan into the Asian countries, paving the way for the formation of a yen bloc.
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	A Yen Bloc in Asia: An Integrative Approach
	Author: Kwan, C. H. Book: Journal of the Asia Pacific Economy
	Year: 1996 Vol: 1(1), pages 1-21.
	This paper studies the possibility of forming a yen bloc in Asia from four complementary approaches--(1) internationalization of the yen, (2) optimal peg for the Asian countries, (3) optimum currency areas, and (4) tripolar monetary system--which offer, respectively Japanese, Asian, regional and global perspectives of the issue. The focus is on the implications of the formation of a yen bloc for macroeconomic stability in participating countries (including Japan itself) and the global economy. The Asian NIEs, which compete with Japan in international markets, are better candidates than the ASEAN countries and China to join a yen bloc.
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	Optimal Pegs for East Asian Currencies
	Author: Benassy Quere, Agnes Book: Journal of the Japanese and International Economies
	Year: 1999 Vol: 13(1), pages 44-60.
	It has been evidenced that the U.S. dollar is prominent in the exchange rate regimes of Asian countries. This paper shows that the relative stability of Asian exchange rates against the U.S. dollar until the 1997 crisis is not accounted for by the theory of optimum currency areas, in contradiction to the situation in Europe vis-a-vis the deutsche mark. An alternative framework is proposed where the absence of a yen bloc is explained by the mismatch between the country distribution of trade and the currency distribution of the debt. It is shown that the lack of cooperation makes Asian countries underweight the yen in their implicit basket pegs.
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	IN PRAISE OF THE YEN
	Author: DAVID BAIN Book: This article is available online at Asiaweek.com. The link is http://www.asiaweek.com/asiaweek/99/0122/feat12.html
	Year: 1999
	This article points out that the mis-link of Asian currencies to the US dollar is no longer suitable for strengthen Asian economies. The author suggests to establish a yen bloc.
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	Financial Liberalization, the Wealth Effect,and the Demand for Broad Money in Japan
	Author: Toshitaka Sekine Book: MONETARY AND ECONOMIC STUDIES
	Year: 1998 Vol: Vol.16, No.1 35-55
	This paper examines the demand for broad money in Japan from 1975 to 1994. In spite of the large shocks resulting from financial liberalization and the subsequent "boom and bust" of the "bubble" economy, the paper confirms that a stable money demand function can still be set up by taking proper account of financial liberalization and the wealth effect, and by adopting an adequate econometric strategy. In addition, a super exogeneity test is conducted, and its implication is considered in the context of the monetary transmission mechanism.
	Remarks:

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References related to Asia (74 references are shown.)

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	Managing Currency Crises in Emerging Markets
	Author: Michael Dooley and Jeffrey Frankel, Editors Book: Managing Currency Crises in Emerging Markets
	Year: March, 2001
	This book collects a number of papers published during the conference which was held March 28-31, 2001. Some of them are downloadable while some are still undergoing update process.
	Remarks: http://nber.com/books/mgmtcrises/

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	Leading Indicators of Currency Crises in Emerging Economies
	Author: O. Burkart Book: The 20th International Symposium on Forecasting
	Year: 2000
	This study identifies common features of currency crises in 15 emerging countries over the period 1980-1998. By analyzing such features, we build an early-warning system aimed at predicting looming crises in probabilistic terms. This work departs from the existing literature in several ways. First, we use quarterly data, in contrast to other studies, which are based on monthly or annual data. This allows us to characterize crises more accurately and also to analyze the behavior of leading indicators as actual crises approach. Second, the overvaluation of currencies is assessed by using real effective exchange rates, instead of the usual bilateral rates. In addition, capital controls dummies are included in the set of explanatory variables and contagion indicators are constructed. Finally, we use the Fisher linear discriminant analysis technique. The model yields a relatively good - and unbiased - ratio of correct predictions: four out of five crises are predicted correctly and only one out of five non-crises is predicted as a crisis. These results compare favorably to those of other models. For early warning systems, there exists a fundamental trade-off based on the Bayes’ formula in a context of rare events: to a certain extent, one has to choose between a high ratio of good classifications of crises and a low ratio of false alarms. Furthermore, using Bayes’ formula allows us to calculate the posterior probability that a given emerging economy will be in a period of currency crisis within a one-year horizon.
	Remarks: Paper is obtainable upon request: http://isf2000.deio.fc.ul.pt/absview.asp?AbsID=159

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	An Examination of Uncovered Interest Rate Parity in Segmented International Commodity Markets
	Author: Burton Hollifield (University of British Columbia) Raman Uppal (University of British Columbia) Book: The Journal of Finance
	Year: Dec, 1997 Vol: Volume: 52 Number: 5 Page Number: 2145 - 2170
	They examine the effect of segmented commodity markets on the relation between forward and future spot exchange rates in a dynamic economy. They calculate the slope coefficient in our theoretical economy from regressing exchange rate changes on forward premia. With reasonable parameter values, the slope coefficient is less than unity. However, even for extreme parameters the slope is not less than zero, as found in the data. A negative slope coefficient in a nominal version of the model requires the covariance between monetary shocks and relative output shocks to be significantly negative, in contrast to the covariance in the data.
	Remarks: Paper can't be downloaded on web!

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	An Empirical Investigation into the Causes of Deviations from Covered Interest Parity across the Tasman
	Author: Moosa, Imad A. Book: New Zealand Economic Papers
	Year: 1996 Vol: 30(1), pages 39-54.
	This paper examines deviations from the equilibrium condition implied by covered interest parity as applied to the exchange rate between the Australian and New Zealand dollars over the period 1985 to 1994. Formal empirical evidence shows that spot and forward speculation do not play any role in determining the forward exchange rate. The significant deviations in 1985 are attributed to political risk. Further shrinkage of the deviations in the 1990s is attributed to a possible reduction in transaction costs resulting from financial deregulation.
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	A Multivariate GARCH Model of Risk Premia in Foreign Exchange Markets
	Author: Malliaropulos, Dimitrios Book: Economic Modelling
	Year: 1997 Vol: 14(1), pages 61-79.
	This paper investigates the existence of time-varying risk premia in deviations from uncovered interest parity based on the market capital asset pricing model. The empirical analysis is conducted using a broad data set of seven major currencies against the US dollar, and a world equity index in order to approximate the benchmark portfolio. The conditional covariance matrix of excess returns is modelled as a multivariate GARCH process. The results indicate significant conditional systematic risk. Estimated conditional beta coefficients are very similar across currencies and behave uniformly over time. The explanatory power of the model is significantly higher compared to the constant beta CAPM specification. Furthermore, estimation results suggest that (1) expected excess returns are less volatile in foreign exchange markets compared to stock markets, and (2) including nominal dollar assets in international equity portfolios can reduce overall portfolio risk.
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	Technical Trading Rule Profitability and Foreign Exchange Intervention
	Author: LeBaron, Blake Book: Journal of International Economics
	Year: 1999 Vol: 49(1), pages 125-43.
	There is reliable evidence that simple rules used by traders have some predictive value over the future movement of foreign exchange prices. This paper will review some of this evidence and discuss the economic magnitude of this predictability. The profitability of these trading rules will then be analyzed in connection with central bank activity using intervention data from the Federal Reserve. The objective is to find out to what extent foreign exchange predictability can be confined to periods of central bank activity in the foreign exchange market. The results indicate that after removing periods in which the Federal Reserve is active, exchange rate predictability is dramatically reduced.
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	Estimating Aid-Allocation Criteria with Panel Data
	Author: Trumbull, William N.; Wall, Howard J. Book: Economic Journal
	Year: 1994 Vol: 104(425),pages 876-82.
	In 1990, the net amount of economic aid, or official development assistance, to all recipients from all multilateral and bilateral sources was about $62 billion, an amount that exceeded the GDPs of Greece and Portugal. Despite the size of this yearly transfer there has been no rigors modeling and estimation of the criteria by which it occurs. As a result, there is little agreement about the extent to which ODA is allocated according to the needs of the recipient countries. The purpose of this paper is to develop a rigorous theoretical model of ODA allocation that can be used to provide consistent estimates of the importance of recipient needs.
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	East Asian Monetary Cooperation
	Author: Chalongphob Sussangkarn Book: available online at http://www.info.tdri.or.th/chals.pdf
	Year:
	This article gives the necessity of promoting the monetary cooperation in east Asia. The author also provides his supports for the establishment of an Asian Monetary Fund. In addition, he/she suggests the focuses of Asian monetary cooperation.
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	Does Foreign Exchange Intervention Work?
	Author: Kathryn M. Dominguez and Jeffrey A. Frankel Book: Book Title: Does Foreign Exchange Intervention Work?
	Year: September 1993
	Following the Versailles G-7 summit of 1982, most government officials and academic analysts downplayed the potential impact of exchange market intervention unless such intervention was permitted to affect national monetary policies. This study challenges the conventional wisdom. Using previously unavailable data on daily intervention by the US Federal Reserve and the German Bundesbank, the authors find to the contrary that even "sterilized" intervention can have an effect, especially if it is known to the markets. Implications are drawn for intervention policy and its role in the international coordination process.
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	Foreign Exchange Market Trading Volume and Federal Reserve Intervention
	Author: Alain Chaboud, Federal Reserve, Board of Governors Book:
	Year: July 1999
	The authors find a large positive correlation between daily trading volume in currency futures markets and foreign exchange intervention by the Federal Reserve over the period 1979-1996. Neither contemporaneous nor predicted volatility can fully account for the increases in trading activity. Whether or not the intervention operation is publicly reported appears to be an important determinant of trading volume.
	Remarks: This paper is downloadable at: http://www.unet.brandeis.edu/~blebaron/wps/volpap.pdf

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	The exchange rate and the MPC: What can we do?
	Author: Sushil Wadhwani Book: Bank of England. Quarterly Bulletin; London
	Year: Aug 2000 Vol: Vol. 40, Iss. 3; pg. 297-306, 10 pgs
	In Sushil Wadhwani's speech (member of the Bank of England's Monetary Policy Committee), he argued that looking only at a two-year ahead inflation forecast when setting interest rates is likely to be suboptimal, and that allowing asset price misalignments to have an additional impact on interest rates could enable a reduction in the volatility of inflation. Currently, sterling is probably overvalued against the euro, and so this might affect the appropriate level of interest rates. He also suggested that, under certain circumstances, sterilized intervention can be effective.
	Remarks: The full text is downloadable at: http://global.umi.com/pqdweb?Did=000000058049040&Fmt=6&Deli=1&Mtd=1&Idx=36&Sid=1&RQT=309&Q=1&IE=x.pdf

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	The profitability of technical trading rules in the Asian stock markets
	Author: Bessembinder, H. and Chan, K. Book: Pacific-Basin Finance Journal
	Year: 1995 Vol: 3(2-3), 257-284
	The authors assess whether some simple forms of technical analysis can predict stock price movement in Asian markets. They find the rules to be quite successful in the emerging markets of Malaysia, Thailand and Taiwan. The rules have less explanatory power in more developed markets such as Hong Kong and Japan. On average for their sample, mean percentage changes in stock indices on days that the rules emit buy signals exceed means on days that the rules emit sell signals by 0.095% per day, or about 26.8% on an annualized basis. They estimate ``break-even'' round-trip transactions costs (which would just eliminate gains from technical trading) to be 1.57% on average. They also find that technical signals emitted by U.S. markets have substantial forecast power for Asian stock returns beyond that of own-market signals. This is consistent with the reasoning that the technical rules identify periods when global equilibrium expected returns deviate substantially from their unconditional mean.
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	Evaluating Chart-Based Technical Analysis: The Head-and-Shoulders Pattern in Foreign Exchange Markets
	Author: Chang, Kevin; Osler, Carol L. Book: Federal Reserve Bank of New York Research Paper
	Year: 1994 Vol: 9414, pages 30..
	This paper evaluates rigorously the preductive pewer of the head-and-shoulders pattern which is one of the standard patterns used by chart-based technical analysts. We apply this trading rule to daily dollar exchange rates during the floating rate period (March 1973-June 1994). To do so we use an objective, computer-implemented algorithm to identify head-and-shoulders patterns, basing the algorithm on criteria recommended in published technical analysis manuals. The resulting profits, replicable in real-time, are then compared with the hypothesis of a random walk. Results: The head-and-shoulders trading rule appears to have some predictive power for the mark and yen but not the Canadian dollar, Swiss franc, French franc, or pound. Profits for the mark and yen are large but extremely risky.
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	Support for Resistance: Technical Analysis and Intraday Exchange Rates
	Author: Osler, Carol Book: Federal Reserve Bank of New York Economic Policy Review
	Year: 2000 Vol: 6(2), pages 53-68..
	"Support" and "resistance" levels--points at which an exchange rate trend may be interrupted and reversed--are widely used for short-term exchange rate forecasting. Nevertheless, the levels' ability to predict intraday trend interruptions has never been rigorously evaluated. This article undertakes such an analysis, using support and resistance levels provided to customers by six firms active in the foreign exchange market. The author offers strong evidence that the levels help to predict intraday trend interruptions. However, the levels' predictive power is found to vary across the exchange rates and firms examined.
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	The Stability of moving average technical trading rules on the Dow Jones Index
	Author: LeBaron Book: Derivative Use, Trading and Regulation
	Year: 2000 Vol: 5, 324-338
	Using the US Dow Jones Industrial Average Index, the author found that technical trading rule profits have fallen recently.
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	Exchange bands among Asian currencies
	Author: Anthony Rowley Book: Focus Japan
	Year: 2001 Vol: Vol. 28, Iss. 3; pg. 12
	Some East Asian nations, including Japan, are now casting eyes on Europe's economic and monetary union experience and dreaming of their own regional unity. The fact that they appear to be putting the cart before the proverbial horse in contemplating monetary union in advance of economic union (while not even mentioning political union) does not necessarily mean that dreams are destined to be shattered. Monetary collaboration is likely to be a catalyst for wider cooperation. At first sight, East Asia's achievements in the field of monetary cooperation appear modest. The rebuff Japan received from the US and the IMF when it proposed an Asian Monetary Fund during the 1997 financial crisis seemed to destroy any hopes for meaningful regional initiatives. Lately, however, Asian nations have become a little bolder again.
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	Post-crisis Exchange Rate Policies in East Asia: Options and Challenges
	Author: Nicolas, Francoise Book: Asia-Pacific Journal of Economics and Business
	Year: 2000 Vol: 4(1), pages 4-27.
	This paper highlights the pivotal role of exchange rate policies in the build-up to the recent Asian financial crisis. In the wake of the crisis, some economists have favoured purely floating exchange rates and others have called for the establishment of a currency board. This paper suggests the adoption of some form of managed flexibility, such as a monitoring band. It concludes with an assessment of the rationale and chances for tighter monetary cooperation within the ASEAN region.
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	Smoke and Mirrors in the Foreign Exchange Market
	Author: Willem H. Buiter and Anne C. Sibert Book:
	Year:
	The plight of manufacturing has focussed attention on the sterling’s persistent strength. The MPC recognises the problem, but argues there is little it can do. It is mandated to pursue the government’s inflation target. Only subject to this target being met, can other objectives be pursued. This leaves little scope for reining in the pound; the short-term interest rate the MPC uses as its instrument cannot be used to achieve both inflation and exchange rate goals. The authors claim that there are additional monetary and financial policy tools available.
	Remarks: The text is downloadable at: http://www.nber.org/~wbuiter/observer.pdf

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	The Joint Ministerial Statement of the ASEAN+3 Finance Ministers Meeting
	Author: Book:
	Year: 2001 Vol: available online at http://www.adb.org/AnnualMeeting/2001/Speeches/joint_ministerial_statement.pdf
	In this Joint Statement, finance ministers from ASEAN+3 countries expressed their commitments to expand the a network of bilateral currency swap arrangements.
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	Financial Liberalization in Africa and Asia
	Author: Huw Pill, Mahmood Pradham Book: Finance & Development
	Year: 1997 Vol: Vol 34 Number 2
	Asian countries have generally been more successful than African countries in liberalizing their financial systems. Why have their outcomes differed? Asia’s experience with liberalization offers some useful lessons for Africa.
	Remarks: This article is based on the authors’ paper, “Financial Indicators and Financial Change in Africa and Asia,“ IMF Working Paper No. 95/123 (Washington: IMF, November 1995).

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	Financial Sector Reform and Sustainable Development: The Case of Costa Rica
	Author: Goldstein, Don Book: Ecological-Economics
	Year: 2001 Vol: 37(2),pages 199-215..
	How can financial sector reform be designed specifically so that it enhances the prospects for sustainable development? This paper begins an analysis of this little-discussed intersection, with a focus on the problems and possibilities facing Costa Rica. Policy changes that encourage financial markets to incorporate long-term environmental sustainability concerns will require moving beyond a standard model of financial liberalization. Flighty financial flows, systemic pressures against innovation, and unpriced environmental externalities all mean that real sector environmental performance will be adversely affected by financial sector dynamics, lacking appropriate policy markers. Financial market policies must encourage market forces to channel capital flows that build productive capabilities based on complementarities between development and environmental quality. Costa Rica's reform process and unusual depth of experience in pursuing sustainable development make it an ideal place for such financial market innovations to be attempted. Getting its incentive system right in financial restructuring could aid immensely in the emergence and application of sustainability-based competitive capabilities. A set of market-based "green" financial reforms is proposed, including tax-advantaged banking and bond programs, rural group lending, and a single certification entity for potential borrowers in these programs.
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	The Effects of Liberalisation on Market and Currency Risk in the European Union
	Author: Carrieri, Francesca Book: European-Financial-Management
	Year: 2001 Vol: 7(2), pages 259-90..
	This paper investigates the effects of liberalisation on the pricing of market and currency risk for a number of financial markets in the European Union (EU). An International Asset Pricing Model with a multivariate GARCH-in-Mean specification and time-varying prices of risk is used for the four markets with the largest capitalisation in the EU. Only one price of market risk exists and international investors are rewarded for their exposure to currency risk. The evidence shows that all prices of risk are time-varying and have been decreasing during the process of liberalisation. There is also evidence that markets react to period of uncertainty in the process toward the completion of liberalisation. In addition, the operation of the European Monetary System has generated lower covariances. As a consequence, total risk premia have declined in the last decade.
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	International Banking Crises: A Duration Analysis
	Author: Abderrezak, Ali Book: Global-Economy-Quarterly
	Year: 2000, Vol: 1(4), pages 359-73.
	The latest currency and banking crises that have challenged various emerging economies may be viewed as mere episodes in a long legacy of financial crises that have confronted capitalist economies. With market forces bringing together record numbers of economies in the global market, thus risking financial crisis contagion, further analysis of banking crises may be needed to insure adequate future policymaking. Using parametric hazard models, this study examines the determinants of banking crisis duration. From a sample of thirty-two international banking crises, the statistical evidence illustrates a case of positive duration dependence, indicating that banking crises are more likely to terminate as they grow older. The study also identifies financial liberalization and government fiscal deficits as significant determinants of the typical banking-crisis duration.
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	Country Risk: Economic Policy, Contagion Effect or Political Noise?
	Author: Nogues,-Julio; Grandes,-Martin Book: Journal-of-Applied-Economics
	Year: 2001 Vol: 4(1), pages 125-62.
	The opening of the capital account was one of the important structural reforms implemented by Argentina. This liberalization increased the linkage of the real economy with the changing conditions of the international financial markets. In particular, recent data show a clear relation between interest rates and the business cycle on the one hand, and sovereign spreads on the other. In order to understand better these linkages, it is necessary to analyze the determinants of these spreads also known as country risk. Using monthly data for the period 1994 to 1998, we find that this spread is explained by: 1) growth expectations, 2) fiscal deficits, 3) the debt service to export ratio and its growth rate, 4) contagion effects, 5) external shocks including movements of international interest rates, and 6) political noise. Based on these findings, we offer a discussion of some of the policies that should be implemented in order for the spreads to start declining and for the country to eventually reach an "investment grade" rating for its sovereign bonds.
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	Seasonality in Liquidity Indicators: The Greek Experience.
	Author: Xenakis, Andreas Book: Spoudai
	Year: 2001 Vol: 51(1-2), pages 114-41.
	This paper examines the deterministic and stochastic behavior of the seasonal component of four economic time series and their natural logarithms, representing various concepts of Greek liquidity indicators. The four series are the currency in circulation (M0), the money supply in narrow sense (M1), the money supply in wide sense (M3) and the new liquidity aggregate (M4N). The whole period examined is divided in three subperiods, according to different financial policies, that is the regulated period (1974-81), the adaptation period (1982-93) and the financial liberalization period (1994-98). The examination shows that the seasonal component of the four monetary series contains both deterministic and stochastic features. The deterministic part of the seasonal component exhibits a weakly increasing variability in time for the first three series, while the stochastic part seams to have the same I(1,1) integrated pattern for all series and periods. A modified OCSB test for seasonal unit roots is applied, taking into account the moving average, seasonal and non-seasonal, part of the series and using proper critical values, specifically calculated for each case.
	Remarks: (In Greek. With English summary.)

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	International Capital Movements, External Imbalances and Economic Growth: The Case of Turkey
	Author: Akcoraoglu, Alpaslan Book: Yapi-Kredi-Economic-Review
	Year: 2000 Vol: 11(2), pages 21-36.
	The objective of the present paper is to examine the effects of international capital flows on current account instability and economic growth for the specific case of Turkey. The financial crisis which began in July 1997 in the East Asian countries invoked further theoretical and empirical research on the social costs and benefits of international capital flows. While some authors emphasize the role of capital movements in generating financial instability, the neoclassical economists claim that such flows can provide the opportunities for developing economies to accelerate economic growth. On the other hand, Turkey has pursued an extreme financial liberalization policy since the late 1980s and lifted the restrictions on capital flows in 1989. The evidence presented in this paper indicate that the benefits of capital flows are not sufficient to offset the risks of allowing the liberalization of capital movements. The findings of this paper suggest that international capital flows do not have a beneficial effect on economic growth for the specific case of Turkey. In addition, empirical evidence reveals that the liberalization of the capital flows has become a major cause of current account instability in Turkey.
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	Globalization, institutions and social cohesion
	Author: Franzini, Maurizio; Pizzuti, Felice R., eds. Book: Translation
	Year: 2001 Vol: pages viii, 309..
	Seventeen papers, presented at a conference held at Rome University "La Sapienza" in December 1998, address the new wave of worldwide economic integration processes that have been taking place over the last quarter of the twentieth century, usually referred to as "globalization" of the economy or "neo-globalization." Papers focus on how globalization of 2000 differs from the free trade of 1900; specificity and historical differences of financial globalization; globalization and foreign direct investments; globalization, localization of production activities, and income distribution in the advanced countries; globalization, profits, and salaries; international relocalization and employment; an analysis for the traditional Italian industries; international labor standards and child labor; globalization, welfare state, and social dumping; a new perspective on globalization, growth, inequalities, and democracy; global flexibility; globalization and social policy instruments in Europe; globalization and social equity; multinational corporations and global and international models of pension provision in Ireland; globalization and the reform of the international monetary system;; globalization, regionalism, and the nation state; financial liberalization, the European single currency, and the problem of unemployment; and monetary policy and competitiveness in the euro area. Franzini is at the University of Siena. Pizzuti is at the University of Rome "La Sapienza." No index.
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	The Anatomy of the East Asian Crisis: An Alternative Model of Currency Crises
	Author: De Brito, Jose Brandao Book: University of Birmingham, Department of Economics Discussion Paper
	Year: 1999 Vol: 99/16, pages 24..
	Following the East Asian crisis two core ideas seemed to gather considerable support amongst researchers, namely that previous models of currency crisis are not fully suitable to examine this particular set of events and that the Asian crisis ensued from a financial plight. The analysis presented here attempts to contribute to remedy the former while challenging the latter on the grounds that it tells only part of the story. This paper employs a macro dynamic model to examine how the increase in the money supply that predictably follows financial liberalization renders a country vulnerable to a currency crisis in the presence of uncertainty on the timing of the monetary expansion reversal that may eventually lead to a fully-fledged crisis. The model predicts that after money expansion, output increases while the current account deteriorates and a situation of excess-capacity and bubbles in the asset markets develops. Therefore the authorities face a tough policy trade-off between long-run sustainability and short-term prosperity. If authorities fail to correct those imbalances, eventually investors launch a speculative attack. It turns out that the model's result provides a quite faithful description of the Asian crisis' overall picture. The model also suggests that the crisis will have a long term impact.
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	A Note on the Determinants of UK Business Cycles
	Author: Day, Alexander; Leith, Campbell; Wren-Lewis, Simon Book: University of Exeter, Department of Economics Discussion Paper
	Year: 1998 Vol: 99/12, pages 8.
	In their empirical analysis of Real Business Cycle models for the UK, Holland and Scott (1998) find that they cannot reject the proposition that movements in output are largely determined by "productivity shocks" which are independent of demand side variables, such as interest rates. In this note we extend their work to allow for the impact of financial liberalization and credit availability. We find that credit availability has had a significant impact on movements in output, and that, when these effects are controlled for, monetary policy variables, including interest rates, also cause output. This is consistent with the conventional view that demand-expansion was the cause of the boom of the late 1980s and appears to reject a RBC interpretation of output movements.
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	A Model of Financial Crises in Emerging Markets
	Author: Chang, Roberto; Velasco, Andres Book: Quarterly-Journal-of-Economics
	Year: 2001 Vol: 116(2), pages 489-517.
	The authors develop a model in which financial crises in emerging markets may occur when domestic banks are internationally illiquid. Runs on domestic deposits may interact with foreign creditor panics, depending on the maturity of the foreign debt and the possibility of international default. Financial liberalization and increased inflows of foreign capital, especially if short term, can aggravate the illiquidity of banks and increase their vulnerability. The primary role of illiquidity is consistent with the existence of asset price booms and crashes and of government distortions.
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	Sequencing Capital Account Liberalizations and Financial Sector Reform
	Author: Johnston, R. Barry. Book: International Monetary Fund Papers on Policy Analysis and Assessment
	Year: 1998 Vol: PPAA/98/08, pages 22.
	: Additional urgency should be attached to financial sector reform when a country begins to liberalize its capital account. The adoption of prudential regulations based on generally accepted best practices will normally not entail restrictions on capital flows and will support the move toward capital account convertibility. Monetary and exchange rate policy will be constrained by increased capital flows, and monetary instruments should be evolved toward more market-based arrangements. Discriminatory reserve requirements can introduce a wedge between domestic and foreign interest rates. The sequencing of liberalizations should reflect the more general objectives of improving efficiency and promoting financial and macroeconomic stability.
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	Capital Flows and Financial Crises: Theory versus Reality: Review Article
	Author: Benzing, Cynthia Book: Atlantic-Economic-Journal
	Year: 2001 Vol: 29(1), pages 107-12.
	The book Capital Flows and Financial Crises contains nine scholarly essays written by authors such as Barry Eichengreen, Albert Fishlow, Carmen M. Reinhart, Vincent Raymond Reinhart, and Jeffrey D. Sachs. The essays are grounded in reality and include a detailed review of capital control usage in emerging countries. Four of the essays are case studies that explain how different conditions and levels of developments may lead to different policies with varying degrees of success. Capital Flows and Financial Crises encourages economists to consider the particulars of a developing country before applying an economic cure, reexamines accepted economic theory in light of recent financial crises, and suggests a more moderate approach to financial liberalization given the inefficiencies and lack of regulation in emerging markets.
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	Globalization and its discontents
	Author: McBride, Stephen; Wiseman, John, eds. Book: New York: St.Martin's Press; London: Macmillan Press
	Year: 2000 Vol: pages xvi, 237.
	Fifteen papers, presented at a conference held at Simon Fraser University in July 1998, examine central dilemmas in relation to understanding the nature of globalization; explore political agency and the instruments of globalization; discuss contradictions and ambiguities; and address crisis, levels of action, and alternatives. Papers focus on the definition of globalization; the politics of globalization and labor strategies; the case of Australia and international finance; central bank independence in Japan and Italy; globalization and the policy process; international financial institutions, international capital flows, and financial liberalization in developing countries; benchmarking, global best practice, and production renorming in the Australian coal industry; explaining the limited impact of international tax competition; Canada's nonimmigrant employment authorization program; the case of recent revisions in U.S. immigration legislation; a legal and political critique of the International Confederation of Free Trade Unions' labor clause proposal; implications of globalization and pluralization for the Canadian welfare state; economic turmoil in Asia; rethinking global strategies; and alternatives to oppressive globalization. McBride is at Simon Fraser University. Wiseman is at RMIT University. Index.
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	States, banks, and markets: Mexico's path to financial liberalization in comparative perspective
	Author: Auerbach, Nancy Neiman Book: Political Economy of Global Interdependence series. Boulder and Oxford: Westview Press
	Year: 2001 Vol: pages xiii, 185.
	Explains why the transition to financial liberalization beginning in the 1980s was accompanied by economic crisis and declining growth rates in countries such as Mexico, whereas the same policy was associated with high growth rates in other countries, such as South Korea and Hong Kong. Explores the interaction between financial elites and state officials with respect to Mexican financial policy making over time, highlights the shift from state-led to bank-led finance, and relates financial policy orientation to economic performance. Considers the effects of a bank-dominated financial market structure on the politics of financial policy in Germany and Mexico. Compares the case of South Korea--an apparently successful case of liberalization with government guidance--with that of Mexico--an unsuccessful case of liberalization without government guidance. Provides a comparative study of the transitions to financial liberalization in Turkey, South Korea, Hong Kong, and Mexico, focusing on the relationship between the market and state in the context of policy-making leadership. Reflects on the Mexican peso crisis and the South Korean financial crisis. Auerbach is Associate Professor of International Political Economy at Scripps College. Bibliography; index.
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	Privatization, deregulation and economic efficiency: A comparative analysis of Asia, Europe and the Americas
	Author: Kagami, Mitsuhiro; Tsuji,Masatsugu, eds. Book: Cheltenham, U.K. and Northampton, Mass.: Elgar; distributed by American International Distribution Corporation, Williston, Vt..
	Year: 2000 Vol: pages xii, 302.
	Twelve papers examine situations of deregulation and the privatization process, exploring favorable results as well as negative effects in developed and developing countries. Papers focus on privatization and deregulation in Japan (Mitsuhiro Kagami); a review of Korea's economic deregulation policy (Hwa-dong Kim); a survey of deregulation in Indian industry (Sunil Mani); an assessment of economic reform in Latin America (Terry McCoy); a survey of the liberalization of public enterprises in the United Kingdom since 1979 (Michael Pollitt); experience in U.S. regulation and deregulation (Sanford Berg); deregulation in the Japanese telecommunications market (Masatsugu Tsuji); deregulation and reforms in India's telecommunications industry (Mani); privatization and regulatory reforms in Latin American telecommunications (Luis Gutierrez); deregulation of the U.K. electricity supply industry, 1989-98 (Tanga McDaniel); lessons in U.S. electricity market reform (Sanford Berg); and financial liberalization, deregulation, and monitoring in Japan (Chie Kashiwabara). Kagami is with the Japan External Trade Organization. Tsuji is at Osaka University. Index.
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	The Interest Rate Sensitivity of Commercial Bank Stocks in Korea
	Author: Park, Hyung Geun; Chung, Eek June Book: Bank-of-Korea-Economic-Papers
	Year: 2000 Vol: 3(2), pages 117-34.
	This paper estimates the interest rate sensitivity of Korean bank stocks using a two factor model and examines its relation with the maturity composition of bank assets and liabilities. For the period 1990-93, the first phase of Korean financial liberalization, it found no evidence for the reaction of bank stock prices to interest rate changes. But for the period 1994-97 when financial liberalization accelerated, it found a relatively strong interest rate sensitivity of bank stocks. And in the period after the financial crisis, bank stocks showed low sensitivity to interest rate changes. In addition, cross-section variation in the interest rate sensitivity measure is not significantly related to the maturity mismatch between bank assets and liabilities. This result reveals that information on the maturity composition of an individual bank is not reflected in the price of its stocks in the financial market.
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	Bank Financial Structure in Pre-Crisis East and Southeast Asia
	Author: Reynolds, Stephen E.; Ratanakomut, Somchai; Gander, James Book: Journal-of-Asian-Economics
	Year: 2000 Vol: 11(3), pages 319-31.
	Seeking evidence on the role of bank governance in the 1997 crisis, this paper studys financial structure and bank performance from 1987 to 1997. Financial performance ratios (capital adequacy, liquidity, profitability, and loan preference) are regressed on structural variables (bank assets, net income, administrative expenses, and time), focusing on banks' management efficiency and financial performance. During financial liberalization, loan-preference ratios were higher, perhaps signaling more risk; so were capital-adequacy ratios. Capital adequacy falls, then rises as management size increases; profitability behaves oppositely, indicating diminishing returns. Thailand's, Korea's and Indonesia's banks show stronger lending preference but weaker profitability; possible harbingers of crisis.
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	What Drives Consumption Booms?
	Author: Montiel, Peter J. Book: World-Bank-Economic-Review
	Year: 2000 Vol: 14(3), pages 457-80.
	Consumption booms have been common in both industrial and developing countries, and several explanations have been offered for their occurrence. These include economy-wide wealth effects associated with favorable movements in the terms of trade or euphoric expectations triggered by macroeconomic reforms, Ricardian effects associated with fiscal stabilization, lending booms following financial liberalization, and a variety of distortions in intertemporal relative prices. Using a large cross-country sample of booms, this article assesses how widely applicable these explanations are. The key finding is that wealth effects linked to favorable movements in the terms of trade and anticipated improvements in macroeconomic performance seem to have been more important empirically than explanations relying primarily oil fiscal phenomena or distortions in intertemporal relative prices.
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	The Political Economy of Child Labor and Its Impacts on International Business
	Author: Bachman, S. L. Book: Business-Economics
	Year: 2000 Vol: 35(3), pages 30-41.
	Child labor is linked to global business directly and, more commonly, indirectly. Critics blame increased trade and financial flows for increased child labor, and those criticisms have undermined the legitimacy of further trade and financial liberalization. Companies--including multi-nationals such as Nike, Wal-Mart, Ikea and the Brazilian subsidiaries of U.S. and European automobile manufacturers--have responded with a range of initiatives. Unless business responses alleviate the worst forms of child labor, the legitimacy of continued trade and financial liberalization will continue to be undermined by perceptions that liberalization disproportionately hurts children, especially child workers.
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	The Changing Role of Money in China and Its Implications
	Author: Holz, Carsten A. Book: Comparative-Economic-Studies
	Year: 2000 Vol: 42(3),pages 77-100.
	Economic development is highly correlated with financial sector development. But the emergence, development, and economic implications of different financial structures are not well understood. This paper analyzes the emergence and development of China's financial structure since the beginning of the economic reforms. By focusing on the functions of money, monetary policy, and financial intermediation, it argues that although agricultural and industrial reforms in the early 1980s have led to significant changes in the financial system, financial liberalization has progressed little since. The creation of new financial institutions and markets throughout the 1990s and the recent abandonment of some of the traditional administrative control instruments do not signify a systemic change as the underlying functions remain constrained.
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	Foreign Investment in Colombia's Financial Sector
	Author: Barajas, Adolfo; Steiner, Roberto; Salazar, Natalia Book: International Monetary Fund Working Paper
	Year: 1999 Vol: WP/99/150 ， pages 37.
	This study analyzes foreign investment in Colombia's financial system, chronicling major changes in legislation, describing how investment flows evolved over time, and comparing performance of foreign-owned versus domestic banks. Panel data estimations reveal that financial liberalization in general had a beneficial impact on bank behavior in Colombia. Although the positive contribution of foreign entry may be overstated in recent studies by not controlling for other liberalization factors, foreign (and domestic) entry beginning in 1990 did improve bank behavior by enhancing operative efficiency and competition. However, this came at the expense of a deterioration in the loan quality of domestic banks.
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	Globalization and Environment
	Author: Theodore Panayotou Book: Working Paper No. 53 at Harvard University, Center for International Development (CID) Environment and Development Paper No.1
	Year:
	The abstract of this paper: Economic globalization impacts the environment and sustainable development in a wide variety of ways and through a multitude of channels. The purpose of this paper is (a) to identify the key links between globalization and environment; (b) to identify the major issues addressed in multilateral economic agreements in trade and finance that affect environmental sustainability; and (c) to review priority policy issues affecting the environment in multilateral economic agreements and environment, thus identifying incentives implicit in trade and investment policy measures that affect environmental sustainability. The author categorizes these issues under the primary areas of globalization: trade liberalization, investment and finance, and technology diffusion, the latter including intellectual property rights. In the case of the trade-environment interface, the paper examines the impact of both elements, and the causal relationship between them. It also pays special attention to multilateral environmental agreements and their potential effects on trade. An integrative section on the effects of globalization and environmental policy and performance leads to domestic and international priority policy issues and recommendations. The author concludes that globalization brings with it potentially large benefits as well as risks. The challenge is to manage the process of globalization in such a way that it promotes environmental sustainability and equitable human development. In short, the more integrated environmental and trade policies are, the more sustainable economic growth will be and the more globalization can be harnessed for the benefit of the environment.
	Remarks: The paper can be downloaded in pdf format. http://globalization.about.com/gi/dynamic/offsite.htm?site=http%3A%2F%2Fwww.cid.harvard.edu%2Fcidwp%2F053.htm

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	The Link Wage/Employment and "Regulation" Theory: As Many Relations as Institutional Architectures
	Author: Boyer,Robert Book: CEPREMAP Discussion Paper
	Year: 1998 Vol: 9814,pages 68.
	Contemporary research is built upon a strong substitutability between labor and capital in response to the signals of relative prices, especially from the labor market. "Regulation theory" incorporates the rough complementarity of production factors, and proposes the notion of wage labor nexus in order to capture the density of institutions and coordinating mechanisms, other than price, which govern labor adjustment. Thus as many wage/employment elasticities are observed as institutional architectures. This link was positive within the Fordist growth regime, but it may be negative for small open economies under strong external competition. The paper provides a panorama of results from long-run historical studies, international comparisons, and micro and macro models. Four wage labor nexuses (competitive, Fordist, meso-corporatist and social-democrat) exhibit contrasted elasticities. Under the pressures of globalization and financial liberalization, the elasticity may turn from positive to negative for the same economy. Finally, the primacy of coordinating procedure over technological substitutability or complementarity can be demonstrated analytically. Thus, in order to fight unemployment, it seems more promising to analyze emerging wage labor nexuses and growth patterns than to promote a massive reduction in the costs of labor, with uncertain and modest outcomes.
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	The Contemporary Japanese Crisis and the Transformations of the Wage Labor Nexus
	Author: Boyer,Robert; Juillard,Michel Book: CEPREMAP Discussion Paper
	Year: 1998 Vol: 9822,pages 70.
	This paper surveys the main research findings on the specificity of the Japanese "regulation" mode and growth pattern (with a special emphasis upon the wage labor nexus), compares the recession which began in 1991 with the previous ones, and finally analyzes the institutional transformations taking place during the 90's. Even if mass production and consumption do characterize the Japanese economy, the wage labor nexus is built upon an implicit compromise regarding employment stability, at odds with a typical Fordist one. The contemporary stagnation and uncertainty do not originate from this wage labor nexus being different from the American one, but from the de-synchronization of the whole institutional architecture built after WW II and reformed after the first oil shock, under the pressures of a changing international environment and financial liberalization. The Japanese wage labor nexus allows a lot of flexibility and has been adapting throughout the 90's and is far from being the weakest institutional characteristic. Clearly, the growth pattern itself is challenged by its very success in catching up and is destabilized by a partial financial liberalization. Until now no alternative domestic-led pattern has been found, and political leadership and "vision" are severely lacking.
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	Financial Liberalization and Volatility in Emerging Market Economies
	Author: Aghion,Philippe; Bacchetta,Philippe; Banerjee,Abhijit Book: Universite de Lausanne Cahiers de Recherches Economiques
	Year: 1998 Vol: 9811,pages 25.
	The recent East Asian crises has highlighted the relationship between financial development and output volatility. In this essay the authors develop a simple model of a small open economy producing a tradable good using a non-tradable input and where firms' access to borrowings and investment depends on current cash flows. It then show, first that macroeconomic volatility only occurs at intermediate levels of financial development; second, that whilst full financial liberalization, including an unrestricted opening to foreign lending, can destabilize an emerging market economy, in contrast output volatility can be avoided if the same economy opens up to foreign direct investment only. The paper also draw several policy conclusions regarding the adequate responses to financial crises.
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	Financial Liberalization: The Experience of Developing Countries
	Author: Arestis, Philip; Demetriades,Panicos Book: Eastern-Economic-Journal
	Year: 1999 Vol: 25(4),pages 441-57.
	This paper investigates the experience of developing countries with financial liberalization, focusing on the gap between theory and evidence. While the former suggests positive effects on economic development, the latter pinpoints to significant destabilizing consequences. e argue that the main implicit assumptions of the financial liberalization thesis, perfect information and perfect competition, along with the scant attention paid to stock markets, are responsible for this discrepancy. We conclude by suggesting that a great deal more caution should be disposed in the future when implementing financial liberalization policies.
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	The Changing Role of Financial Intermediation in Europe
	Author: Dufey,Gunter Book: International-Journal-of-Business
	Year: 1998 Vol: 3(1),pages 49-67.
	After a review of factors such as technology and the related policy toward financial liberalization that has affected financial institutions worldwide, this paper focuses on changes in Continental Europe. We identify and review three driving forces: (a) European integration, (b) the factors that cause a growth of securities markets, and (c) financial innovation. The paper arrives at the conclusion that there will be significant changes in the European financial system in terms of the growth of securities markets but that this growth will center on bank-affiliated institutions that will strengthen their position within national markets. In contrast, there will be relatively little impact via cross-border mergers and acquisitions in the banking sector. Finally, the paper suggests some implications for corporate governance, which will not change unless government policy makes the system of financial intermediation more contestable by outsiders and creates the pre-conditions for an effective corporate control.
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	IMF Resource Management in a World of Mobile Capital
	Author: Rowlands, Dane Book: Canadian-Journal-of-Development-Studies
	Year: 1999 Vol: 20(3),pages 465-89.
	This paper examines whether or not liberalized capital-account regulations have increased the frequency and magnitude of IMF programs in developing countries. It briefly reviews the literature on the role of financial liberalization in causing balance-of-payments crises. Empirical evidence is then presented which examines the connection between capital account liberalization and IMF resource use. Contrary to initial expectations, capital account liberalization appears to be associated with reduced reliance on the IMF, at least for the 1965-1995 period. Some possible ways of reconciling these results with the current crisis are suggested, and the consequences for IMF resource management are examined.
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	A General Outlook of the Turkish Industry and Competitiveness of the Private Sector
	Author: Ocak, B. Safa. Book: ISE-Review
	Year: 1997 Vol: 1(1),pages 1-11.
	The following article constitutes a speech delivered at the DEIK Conference in London on September 18, 1996. First, it draws a comparison between the 1980s, the decade of economic and financial liberalization and current economic conditions in Turkey. The effects of the Customs Union on Turkish industry since January 1996 have also been analysed. Finally, banking, textile, ceramics, cement, food and iron and steel sectors are analysed in terms of competitiveness within the context of harmonisation of domestic industries with the European Union member countries.
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	Optimal Bail Out Policy, Conditionality and Constructive Ambiguity
	Author: Freixas, Xavier Book: Universitat Pompeu Fabra, Economics and Business Working Paper
	Year: 1999 Vol: 400, October 1999, pages 31.
	This paper addresses the issue of the optimal behavior of the Lender of Last Resort (LOLR) in its microeconomic role regarding individual financial institutions in distress. It has been argued that the LOLR should not intervene at the microeconomic level and let any defaulting institution face the market discipline, as it will be confronted with the consequences of the risks it has taken. By considering a simple cost benefit analysis we show that this position may lack a sufficient foundation. We establish that, instead, under reasonable assumptions, the optimal policy has to be conditional on the amount of uninsured debt issued by the defaulting bank. Yet in equilibrium, because the rescue policy is costly, the LOLR will not rescue all the banks that fulfill the uninsured debt requirement condition, but will follow a mixed strategy. This we interpret as the confirmation of the "creative ambiguity" principle, perfectly in line with the central bankers claim that it is efficient for them to have discretion in lending to individual institutions. Alternatively, in other cases, when the social cost of a bank's bankruptcy is too high, it is optimal for the LOLR to bail out the institution, and this gives support to the "too big to fail" policy.
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	The Effectiveness of Conditionality and the Political Economy of Policy Reform: Is It Simply a Matter of Political Will?
	Author: Bird, Graham Book: Journal of Policy Reform
	Year: 1998 Vol: 2(1), pages 89-113.
	Although widely used by international financial institutions, policy conditionality often fails in the sense that countries do not fully implement it. Up to now most research has focused on the design of conditionality. This paper, however, uses political economy analysis to address the issue of non-compliance. Either governments agree to conditions with little intention of carrying them through, or circumstances change the benefit-cost ratio of compliance. Analysis of these circumstances points to ways in which conditionality might usefully be reformed.
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	Asian monetary fund reborn
	Author: G Pierre Goad Book: Far Eastern Economic Review
	Year: 2000 Vol: Vol. 163, Iss. 20; pg. 54, 1 pgs
	Stuttering attempts to build an Asian regional framework for financial cooperation took a small but significant step forward on May 6 with an agreement to swap foreign-exchange reserves to fend off financial crises. The trick will be to take the next step and build up enough momentum to overcome the inertia and rivalries that have doomed previous attempts to start what all agree will be a long process of building regional economic institutions. The Chiang Mai accord removes two important roadblocks to closer economic cooperation in Asia: China is on board and a credible framework for future discussions is in place. The Chiang Mai accord does give Southeast Asia and Northeast Asia a structure and an excuse to keep talking about pan-regional economic issues in concrete terms.
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	The profitability of technical trading rules in the Asian stock markets
	Author: Bessembinder, H. and Chan, K. Book: Pacific-Basin Finance Journal
	Year: 1995 Vol: 3(2-3), 257-284
	The authors assess whether some simple forms of technical analysis can predict stock price movement in Asian markets. They find the rules to be quite successful in the emerging markets of Malaysia, Thailand and Taiwan. The rules have less explanatory power in more developed markets such as Hong Kong and Japan. On average for their sample, mean percentage changes in stock indices on days that the rules emit buy signals exceed means on days that the rules emit sell signals by 0.095% per day, or about 26.8% on an annualized basis. They estimate ``break-even'' round-trip transactions costs (which would just eliminate gains from technical trading) to be 1.57% on average. They also find that technical signals emitted by U.S. markets have substantial forecast power for Asian stock returns beyond that of own-market signals. This is consistent with the reasoning that the technical rules identify periods when global equilibrium expected returns deviate substantially from their unconditional mean.
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	Exchange bands among Asian currencies
	Author: Anthony Rowley Book: Focus Japan
	Year: 2001 Vol: Vol. 28, Iss. 3; pg. 12
	Some East Asian nations, including Japan, are now casting eyes on Europe's economic and monetary union experience and dreaming of their own regional unity. The fact that they appear to be putting the cart before the proverbial horse in contemplating monetary union in advance of economic union (while not even mentioning political union) does not necessarily mean that dreams are destined to be shattered. Monetary collaboration is likely to be a catalyst for wider cooperation. At first sight, East Asia's achievements in the field of monetary cooperation appear modest. The rebuff Japan received from the US and the IMF when it proposed an Asian Monetary Fund during the 1997 financial crisis seemed to destroy any hopes for meaningful regional initiatives. Lately, however, Asian nations have become a little bolder again.
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	Monetary Cooperation in East Asian Countries: A Possibility from Macro Economic Indexes and Intra-regional Trade Dependency
	Author: Kim, Bong Gil; Igawa, Kazuhiro Book: Kobe Economic and Business Review
	Year: 2000 Vol: 0(45), pages 85-101
	This paper analyzes the possibility of currency area in Asia depending on macro-economic indexes and on intra-regional trade dependency, and possibly depending on financial dependency. These will be compared with those in EU. The next issue will be the process to converge into the currency area in Asia. APEC experience might give us much information about these issues. Not persuasive but voluntary participation of member countries in monetary cooperation and starting from weak cooperation to tighter cooperation will be the style in Asia. However it is not solved yet that gradual set-up of currency area is better or easier than rapid introduction of one common currency. All the arguments depend on the authors' speculative perspective that one global currency system is the best final stage of international monetary system and this stage will not be in far future. The authors will discuss the perspective to a global currency area, taking into account of relations with Dollar and Euro and the Asian currency.
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	Causes of the Financial Crisis and the Need of Monetary Cooperation in East Asia
	Author: Oh, Yong Suk Book: Global Economic Review
	Year: 2000 Vol: 29(2), pages 3-23.
	The Main causes of the East Asian financial crisis in 1997-98 can be divided into domestic and foreign ones. The domestic cause stems from structural and liquidity problems, with growing share of non-performing loans in the financial sector, posing as the most visible manifestation of such problems. On the other side, there is the foreign cause, the sudden fall of the yen against the dollar under the region's unstable foreign exchange system and also its over-dependency on the dollar. Unfortunately, these causes have not yet disappeared. In order to prevent another financial economic crisis from recurring and to secure the regional currency stability in the long run, an external safety device is indispensable. The purpose of the East Asian monetary cooperation device is not only to absorb the external shocks caused by abrupt changes in the dollar/yen rate and sudden flow of capital, but also to settle international liquidity problems among the regional countries. If a device for the East Asian monetary cooperation is established, transparency in both financial and physical markets will be augmented and in the process, so will be the stability of financial and physical transactions.
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	A common currency for the Asia-Pacific
	Author: Kondo, Takehiko Book: Focus Japan
	Year: 2000 Vol: Vol. 27, Iss. 6; pg. 12
	Jacques Attali, once advisor to French President Francois Mitterand and first president of the European Bank for Reconstruction and Development, has suggested that it might be possible to create a single Asian currency centered on the yuan. He is well aware how difficult an undertaking monetary integration is. The formation of the political will necessary for progress toward monetary integration cannot be formed overnight. An Asia-Pacific Common Currency Unit should be created, consisting of a basket of five currencies: the US dollar, Japanese yen, Chinese yuan, South Korean won, and Thai baht.
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	Production Networks in an Economically Integrated Region
	Author: Arndt, Sven W. Book: ASEAN Economic Bulletin
	Year: 2001 Vol: 18(1), pages 24-34.
	This article discusses the political economy context surrounding the Japanese proposal for an Asian Monetary Fund as well as highlights other recent initiatives towards enhanced monetary regionalism. The discussion reveals the keenness that the region has shown towards intensified cooperation in these areas. Nevertheless, the economic/political economy rationale for such cooperation does not appear to have been fully articulated, a void that this paper attempts to fill. Insofar as "regional contagion" is seen as providing the analytical basis for monetary regionalism, a large part of the discussion is devoted to defining and highlighting the various transmission channels through which currency and financial crises may spread contagiously and drawing out policy implications thereof.
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	The Joint Ministerial Statement of the ASEAN+3 Finance Ministers Meeting
	Author: Book:
	Year: 2001 Vol: available online at http://www.adb.org/AnnualMeeting/2001/Speeches/joint_ministerial_statement.pdf
	In this Joint Statement, finance ministers from ASEAN+3 countries expressed their commitments to expand the a network of bilateral currency swap arrangements.
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	Is Japan Creating a Yen Bloc in East Asia and the Pacific?
	Author: Jeffrey A. Frankel Book: Regionalism and Rivalry: Japan and the US in Pacific Asia, J. Frankel andM. Kahler eds.
	Year: 1993 Vol: November, p. 53
	After examining some of the relevant statistics, this paper argues that the evidence of an volving East Asian trade bloc centered on Japan is not as clear as many believe. Trade between Japan and other Asian countries increased substantially in the late 1980s. But intra-regional trade bias did not increase, as it didi, for example, within the European Community. The phrase "Yen Bloc" could be interpreted as referring to the financial and monetary aspects implicit in the words, rather than to trade flows. The second half of the paper does find evidence of growing Japanese influence in the Pacific via financial and monetary channels, rather than primarily via trade flows. But it does not find evidence that the country has taken deliberate steps to establish a Yen Bloc.
	Remarks: This paper is available online at http://papers.nber.org/papers/W4050

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	Assessing the Economic Preconditions for a Yen Bloc
	Author: Madden, Gary; Savage, Scott; McDonald, Andrew Book: Australian Economic Papers
	Year: 2000 Vol: 39(1),pages 25-32
	Stabilising Asia-Pacific exchange rates by establishing a system of pegs, bands or target zones around the Japanese yen requires the compromise of domestic policy autonomy. The cost of doing so is least when members' reaction to economic shocks are symmetric. This study considers which currencies meet this necessary precondition. To assess regional disturbance symmetry the Blanchard and Quah (1989) procedure is employed to distinguish temporary from permanent shocks for paired aggregate output and price time-series. Disturbance correlations between Japan and other Asia-Pacific nations are calculated. Supply-side disturbance correlations are relatively weak and suggest the economic preconditions for a yen bloc are not in place.
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	The Possibility of Forming a Yen Bloc Revisited
	Author: Kwan, Chi Hung Book: ASEAN Economic Bulletin
	Year: 2000 Vol: 17(2), pages 218-32.
	The latest crisis in Asia has vividly illustrated that the traditional exchange rate policy of pegging to the U.S. dollar can be incompatible with macroeconomic stability in the Asian countries. To insulate themselves from the adverse effect of a widely fluctuating yen-dollar rate, these countries should peg their currencies closer to the Japanese yen by targeting a basket of currencies in which the yen carries a substantial weight. By reducing the foreign exchange risk associated with yen-denominated transactions, this major shift in Asia's exchange rate policy should promote wider use of the yen as a regional currency and capital inflow from Japan into the Asian countries, paving the way for the formation of a yen bloc.
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	A Yen Bloc in Asia: An Integrative Approach
	Author: Kwan, C. H. Book: Journal of the Asia Pacific Economy
	Year: 1996 Vol: 1(1), pages 1-21.
	This paper studies the possibility of forming a yen bloc in Asia from four complementary approaches--(1) internationalization of the yen, (2) optimal peg for the Asian countries, (3) optimum currency areas, and (4) tripolar monetary system--which offer, respectively Japanese, Asian, regional and global perspectives of the issue. The focus is on the implications of the formation of a yen bloc for macroeconomic stability in participating countries (including Japan itself) and the global economy. The Asian NIEs, which compete with Japan in international markets, are better candidates than the ASEAN countries and China to join a yen bloc.
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	Optimal Pegs for East Asian Currencies
	Author: Benassy Quere, Agnes Book: Journal of the Japanese and International Economies
	Year: 1999 Vol: 13(1), pages 44-60.
	It has been evidenced that the U.S. dollar is prominent in the exchange rate regimes of Asian countries. This paper shows that the relative stability of Asian exchange rates against the U.S. dollar until the 1997 crisis is not accounted for by the theory of optimum currency areas, in contradiction to the situation in Europe vis-a-vis the deutsche mark. An alternative framework is proposed where the absence of a yen bloc is explained by the mismatch between the country distribution of trade and the currency distribution of the debt. It is shown that the lack of cooperation makes Asian countries underweight the yen in their implicit basket pegs.
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	IN PRAISE OF THE YEN
	Author: DAVID BAIN Book: This article is available online at Asiaweek.com. The link is http://www.asiaweek.com/asiaweek/99/0122/feat12.html
	Year: 1999
	This article points out that the mis-link of Asian currencies to the US dollar is no longer suitable for strengthen Asian economies. The author suggests to establish a yen bloc.
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	Competition Policy in the Asian-Pacific Region
	Author: Lloyd,P.J. Book: Asian Pacific Economic Literature
	Year: 2000 Vol: 14(2), pages 1-13.
	This paper surveys competition policy in the APEC countries. It covers competition-promoting policies such as free trade but focuses on competition law. Fourteen of the 21 APEC countries have comprehensive national competition laws but in some the coverage is limited and the enforcement is weak. After reviewing national, bilateral and regional competition laws, the paper discusses the problems of devising competition law in developing countries with a weak tradition of promoting competition.
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	Regional co-operation and Asian recovery
	Author: Petri,Peter, ed. Book: Singapore: Institute of Southeast Asian Studies
	Year: 2000
	Sixteen papers, presented at a conference held in Boston in May 1998, examine the role of Asia Pacific Economic Co-operation (APEC) and assesses the Asian crisis, financial systems for recovery, and the role of investment and trade flows and policies. Papers focus on the implications of Asia's unprecedented crisis; international context for Asian recovery; policies to encourage the recovery of private capital flows to East Asia; the Asian financial crisis in perspective; social and political context of international trade; prospects for APEC in 1998; financial reform in East Asia post-crisis; currency arrangements in Southeast Asia; the Korean economy at a crossroads; public and private interests in Korea; whether the newly emerging Europe can help the newly declining Asia; foreign direct investment in the wake of the Asian financial crisis; the impact of the Asian financial crisis on trade patterns of the affected economies; regional trading arrangements in the Asia-Pacific region; APEC early voluntary sectoral liberalization; and APEC strategy toward 1999.
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	International Economic Order and Asia-Pacific Cooperation: A View from the Philippines
	Author: Alburo, Florian A. Book: Philippine Review of Economics and Business
	Year: 1995 Vol: 32(2), pages 115-33..
	This paper discusses how the Philippines can productively fit in to the emerging international economic environment. Current Philippine trade and investment policies are examined. The international economic order and Asia-Pacific cooperation are discussed in the context of the ASEAN, APEC and GATT. Modalities of cooperation and its direction are described, and prospects for the Philippines in relation to the international economic order are laid out.
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	Constructing a Global Architecture with an American Blueprint: The Ambivalent U.S. Attitude toward Asian Regional Cooperation
	Author: Snyder, Scott Book: Global Economic Review
	Year: 1999 Vol: 28(3), pages 76-89.
	In step with the global trend toward regionalism, there has been significant progress in the development of a regional institutional framework in Asia, although perhaps to a lesser degree than other parts of the world. This is evidenced by the establishment over the past decade of APEC, ASEAN Regional Forum, and other multilateral attempts to address specific security issues. The attitude of the United States toward the development of such institutions for regional cooperation has been quite ambivalent and its approach might be described as ad hoc, utilitarian or instrumental. This paper examines the rhetoric, politics, and policy of America's seemingly ambiguous and inconsistent approach to Asian regional cooperation in an attempt to illustrate the factors that shape U.S. policy toward such efforts.
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	Long-Run Effects on China of APEC Trade Liberalization
	Author: Adams, Philip D., et al. Book: Pacific Economic Review
	Year: 2000 Vol: 5(1), pages 15-47.
	: Plans for trade liberalization within the Asia-Pacific Economic Co-operation (APEC) Forum include the elimination of all tariffs between member states. The study in this paper uses two computable general equilibrium models to examine the effects of these plans, focusing on China. The modelling shows that liberalization increases China's capital stock and real GDP. The implication for Chinese industries depends on the extent to which liberalization exposes them to additional import competition. Industries strongly stimulated include textiles and communications equipment. Transport equipment is the most adversely affected. Chinese regional results follow from the industrial compositions of the regions, with Zhejiang the most favourably affected and Jilin the least.
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	The Politics of Emerging Pacific Cooperation
	Author: Donald Crone Book: Pacific Affairs
	Year: 1992 Vol: Vol. 65, No. 1., pp. 68-83.
	A number of political factors are examined that underlie the recent delineation of a political and economic group in the Pacific centered on the Asia-Pacific Economic Cooperation conference (APEC). These include changes in domestic policies in several ot the participants; the move toward regional trading blocs in other world areas; contentions over defining potential membership of the group; and competition for influence among overlapping international organizations in the Pacific.
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	Competition Principles and Policy in the APEC: How to Proceed and Link with WTO
	Author: Choi, Byung il Book: Global Economic Review
	Year: 1999 Vol: 28(3), pages 31-48.
	There is a growing consensus that competition-oriented policy framework would be instrumental in achieving the Bogor goal of trade and investment liberalization by 2010/2020. As of now, only eight economies have the experience of operating competition policy for more than a decade. Many emerging economies of the APEC have only begun to introduce competition policy. The Auckland APEC Leaders Meeting of 1999 adopted the APEC competition principles. It is a significant step forward, but more hard work lies ahead: the issue of developing specific and concrete work program to implement the competition principles within the APEC and how to put competition policy in the much broader context of a multilateral trading system. The paper maps out a specific strategy to move the competition policy agenda forward at the APEC and how to link to the WTO and identifies the sources of such value-added and makes a proposal in order to best utilize them.
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	Financial Liberalization in Africa and Asia
	Author: Huw Pill, Mahmood Pradham Book: Finance & Development
	Year: 1997 Vol: Vol 34 Number 2
	Asian countries have generally been more successful than African countries in liberalizing their financial systems. Why have their outcomes differed? Asia’s experience with liberalization offers some useful lessons for Africa.
	Remarks: This article is based on the authors’ paper, “Financial Indicators and Financial Change in Africa and Asia,“ IMF Working Paper No. 95/123 (Washington: IMF, November 1995).

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	Another round
	Author: Tom Holland Book: Far Eastern Economic Review
	Year: 2001 Vol: Vol. 164, Iss. 47; pg. 24, 1 pgs
	The next round of international trade liberalization talks is scheduled to last 3 years. No one connected with the forthcoming negotiations - dubbed the Doha Development Agenda at November's World Trade Organization Meeting - believes the January 1, 2005 target is attainable. The precedents are hardly encouraging. The last trade liberalization round, the Uruguay round, dragged on for 6 years. With the WTO's membership swollen to 144 following the addition of China and Taiwan, it is overly optimistic to expect a deal within 3 years, especially given the tabling of knotty issues like intellectual property rights and increasing demands for inclusion by non-governmental organizations. Inevitably, different interest groups will emerge. Yet despite the tangle of conflicting interests, East Asia's priority in the initial stages of the negotiations will be straightforward.
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