Chapter

Critical Survey of the Literature on Financial and Monetary Integration in East Asia

Yung Chul Park and Charles Wyplosz

in Monetary and Financial Integration in East Asia

Published in print July 2010 | ISBN: 9780199587124
Published online September 2010 | e-ISBN: 9780191723377 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199587124.003.0002
Critical Survey of the Literature on Financial and Monetary Integration in East Asia

Show Summary Details

Preview

East Asian policymakers display interest in regional monetary cooperation, but a regional numeraire, or even an internal common basket, seem distant goals. This chapter reviews the literature on financial and monetary integration as it relates to East Asia, focusing on three issues. First, looking at optimum currency area principles, the literature suggests that the ASEAN+3 countries at best weakly fulfill the traditional criteria. Second, optimal sequencing principles suggest that financial market integration ought to precede the adoption of a common currency. The East Asian countries have largely followed this strategy but the liberalization of financial markets and of capital account transactions are not yet complete and it is by no mean obvious that financial deregulation and opening will pave the way for monetary integration, as it did in Europe.

Keywords: optimum currency area; sequencing; financial liberalization; monetary integration; common baskets

Chapter.  8565 words.  Illustrated.

Subjects: Financial Markets

Full text: subscription required

How to subscribe Recommend to my Librarian

Buy this work at Oxford University Press »

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.