AMU Deviation Indicators for Coordinated Exchange Rate Policies in East Asia and their Relationships with Effective Exchange Rates
After the Asian currency crisis in 1997, the monetary authorities of East Asian countries have been strengthening their regional monetary cooperation. In this paper, we propose a deviation measurement for coordinated exchange rate policies in East Asia to enhance the monetary authorities' surveillance process for their regional monetary cooperation. We calculate an Asian Monetary Unit (AMU) as a weighted average of East Asian currencies following the method used to calculate the European Currency Unit (ECU). Also, we calculate AMU Deviation Indicators which show how much each of the East Asian currencies deviates from a hypothetical benchmark rate in terms of the AMU. Furthermore, we investigate relationships between the AMU Deviation Indicators and the effective exchange rates, which mean international price competitiveness in terms of international trade. We found strong relationships between the AMU Deviation Indicators and the effective exchange rates except for some currencies. The results suggest that monitoring the AMU Deviation Indicator will be useful for the monetary authorities' surveillance in East Asia in order to stabilise their effective exchange rate or price competitiveness among the East Asian countries. Copyright 2006 The AuthorsJournal compilation 2006 Blackwell Publishing Ltd .
Year of publication: |
2006
|
---|---|
Authors: | Ogawa, Eiji ; Shimizu, Junko |
Published in: |
The World Economy. - Wiley Blackwell. - Vol. 29.2006, 12, p. 1691-1708
|
Publisher: |
Wiley Blackwell |
Saved in:
freely available
Saved in favorites
Similar items by person
-
ASIAN MONETARY UNIT (AMU) AS A SURVEILLANCE INDICATORS FOR REGIONAL MONETARY COOPERATION
OGAWA, EIJI, (2011)
-
Asian Monetary Unit and Monetary Cooperation in Asia
Ogawa, Eiji, (2011)
-
Currency Denomination in Asian Bond Markets
Ogawa, Eiji,
- More ...