Exchange Rate Policies in Emerging Asian Countries

Exchange Rate Policies in Emerging Asian Countries

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The future emergence of a European monetary zone is set to transform the configuration of the international monetary system and the roles of the dollar, the Euro and the yen within this system. This book addresses this issue with discussion of:
* exchange rate policies pursued in the principal Asian countries
* the measurement of equilibrium exchange rates for these countries
* the maintenance of the dollar peg by Asian currencies
* the absence of a trend to monetary regionalism based on the yen
* the outlook of regional monetary co-operation
* the outlook of regional monetary co-operation
Case studies pay particular attention to Korea, Taiwan, Singapore and Thailand.

Product Details

ISBN-13: 9781134683796
Publisher: Taylor & Francis
Publication date: 09/02/2003
Series: Routledge Studies in the Growth Economies of Asia
Sold by: Barnes & Noble
Format: NOOK Book
Pages: 464
File size: 4 MB

Table of Contents

List of figuresxi
List of tablesxv
List of contributorsxviii
Editors' introductionxx
Part IExchange rate policies in Asia: the evidence1
1Flexibility or nominal anchors?3
1The setting4
2The convertibility issue11
3Exchange rate choices: fixed rates12
4Exchange rate choices: flexible rates15
5Exchange rate choices: band-basket-crawl (BBC)16
6Conclusion: nominal anchor or flexibility?23
AppendixExchange rate regimes of East Asian countries24
1The setting35
3Fixed rates36
4 and 5Floating rates and band-basket-crawl37
3Exchange rate regimes and policies: an empirical analysis40
2De facto exchange rate regimes in Asia41
3Rationale for exchange rate policies in Asia49
4Summary and concluding remarks56
Appendix 1Computing long-run estimates57
Appendix 2Unit root and cointegration analysis, 1973-9358
Appendix 3Asian external trade59
5Exchange Rate Policy and Effectiveness of Intervention: the case of South Korea69
2Exchange rate system and movement of the exchange rate in the 1980s and 1990s70
3Current account, capital flows and exchange rate80
4Foreign exchange market intervention89
5Concluding remarks99
7Foreign Exchange Rate Fluctuations and Macroeconomic Management: the case of Taiwan109
2A review of Taiwan's exchange rate regime110
3The movement of REER index of NTD since 1980116
4Factors that affect the fluctuations of NTD117
5Consequences of NTD fluctuations128
6Macroeconomic policies regarding exchange rate fluctuations132
7Intermarket relationship between foreign exchange rate and interest rate138
8Concluding remarks140
Part IIExchange rates and economic development: long-run views147
9Industrialization and the optimal real exchange rate policy for an emerging economy149
2Two approaches to industrialization: active and interventionist (Asia) or passive and free-marketeer (Latin America)152
3The pitfalls of optimal industrialization policies154
4The logic of price incentives and industrialization: a model155
5Three complementary arguments to the optimal policy159
6A view of two benchmark cases: Chile and South Korea167
11Asian currencies in the context of export-oriented industrial development188
2Typical stages of Asian industrial development189
3Stages of industrial development, currency theory and behaviour: a life cycle model of Asian currencies191
4Empirical methodology and results193
5The life cycle model and selected Asian currencies197
6The current life cycle stages of Asian currencies looking at recent cross-section data204
7Medium-term outlook for Asian currencies based on life cycle hypothesis: North-East Asia and ASEAN204
8Conclusion and implications of an Asian currency life cycle model211
Appendix 1(a)212
Appendix 1(b)214
13Measuring exchange rate misalignments with purchasing power parity estimates222
1The Balassa--Samuelson effect and its application to measure exchange rate misalignments: a brief review223
2An extended Balassa--Samuelson model227
3Data and econometric estimates230
4Implications for exchange rate levels in emerging Asia234
15FEERs for the NICs: exchange rate policies and development strategies in Taiwan, South Korea, Singapore and Thailand245
1The growth experience of South Korea, Singapore, Taiwan and Thailand245
2Exchange rate policies -- the concept of equilibrium249
3Econometric models of Singapore, Thailand, South Korea and Taiwan252
4Exchange rates and development policies in East Asia257
AppendixThe econometric models in detail271
1Defining the external balance: the case of NIEs280
2The role of the US dollar and the need for a global approach282
Part IIIRegional monetary cooperation: rationale and effects283
17Bloc floating and exchange rate volatility: the causes and consequences of currency blocs285
2Investment and exchange risk reduction: why currency blocs emerge289
3The consequences of bloc floating for equilibrium exchange rates in a bloc-floating regime297
4Empirical evidence of bloc-floating effects307
19The case for a common basket peg for East Asian currencies327
1Exchange rate policies327
3Selecting a peg332
4The constraints imposed by a common peg340
21Is Asia an optimum currency area? Can it become one? Regional, global, and historical perspectives on Asian monetary relations347
1How have Asian exchange rate arrangements evolved?348
2Regional perspectives351
3Historical perspectives360
23Roundtable discussion: prospects for regional monetary cooperation369
Jean Pisani-Ferry369
Masabiro Sugita369
In June Kim372
Andre Icard376
Toru Kusukawa381
Adriaan Dierx383
24The currency crisis in Thailand389
1The prelude to the currency crisis and the present state of the Thai economy390
2Factors behind Thailand's currency turmoil396
3Impact of Thailand's currency crisis408

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