Towards Monetary and Financial Integration in East Asia

Edited by Koichi Hamada, Tuntex Professor of Economics, Yale University, New Haven, US, Beate Reszat, Economist, Hamburg Ministry of Science and Research, Germany and Ulrich Volz, Senior Lecturer in Economics, SOAS, University of London, UK and Senior Research Fellow, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

'Towards Monetary and Financial Integration in East Asia is an important book. East Asia, led by China, has been and will continue to be the largest, most rapidly growing region in the world. Major global imbalances persist, with East Asia in large surplus. Yet East Asian financial and monetary integration is only in the early stages of what will necessarily be a long-run process. These 14 essays by different authors address, in six Parts, fundamental long-run issues and prospects. These include the development of a regional financial architecture, liquidity provision and crisis management, surveillance mechanisms, exchange rate arrangements, currency baskets, an Asian Currency Unit, and ultimately even a single currency. The implications of the rise of China and the role of Japan underlie much of these analyses. However imperfect, the EU is the dominant relevant experience for East Asian financial and monetary integration. It is important to understand, as the authors do, that it took 47 years from the EU's nascent founding to the establishment of the euro, and that economic integration has preceded political integration. This book importantly addresses such basic issues in this time frame and with an appreciation of the political economy difficulties of financial integration.'

• Contents: Foreword Richard N. CooperIntroduction: Prospects for Monetary and Financial Integration in East Asia – Dreams and DilemmasKoichi Hamada, Beate Reszat and Ulrich VolzPART I: THE POLITICAL ECONOMY OF REGIONAL INTEGRATION1. The ASEAN Economic Community and the European ExperienceMichael G. Plummer and Reid W. Click2. The Political Economy of European Economic and Monetary Union Negotiations and Implications for East AsiaHeungchong Kim3. International Political Conflicts and Economic IntegrationKoichi Hamada and Inpyo LeePART II: DEVELOPING BOND MARKETS IN EAST ASIA4. Learning by Doing in Market Reform: Lessons from a Regional Bond FundGuonan Ma and Eli Remolona5. Currency Denomination in Asian Bond MarketsEiji Ogawa and Junko ShimizuPART III: EXCHANGE RATE POLICIES IN EAST ASIA: THE ROLE OF THE DOLLAR6. East Asia’s Role in the Revived Bretton Woods SystemMichael P. Dooley, David Folkerts-Landau and Peter Garber7. Current Account Surpluses and Conflicted Virtue in East Asia: China and Japan under the Dollar StandardRonald McKinnon and Gunther SchnablPART IV: TOWARD MONETARY INTEGRATION IN EAST ASIA?8. Three Cases for Monetary Integration in East AsiaUlrich Volz9. Monetary and Exchange Rate Policy Coordination in ASEAN+1William H. Branson and Conor N. HealyPART V: CURRENCY BASKETS FOR EAST ASIA?10. Capital Markets and Exchange Rate Stabilization in East Asia: Diversifying Risk Based on Currency BasketsGunther Schnabl11. Asian Currency BasketsJohn Williamson12. The Role of an Asian Currency UnitMasahiro KawaiPART VI: THE ROLE OF CHINA13. The Illusion of Precision and the Role of the Renminbi in Regional IntegrationYin-Wong Cheung, Menzie D. Chinn and Eiji Fujii14. Institutional and Structural Problems of China’s Foreign Exchange Market and the RMB’s Role in East AsiaZhang Jikang and Liang YuanyuanIndex