This paper shows that regional trade integration shifts the burden of the exchange rate adjustment towards the less integrated trading partners. Thus, they bear the cost of trade balance expansion, while competitive exchange rate moves vis-a-vis RTA trading partners result in no expansion or...

This paper extends our previous paper (Aizenman, Chinn, and Ito 2008) and explores some of the unexplored questions. First, we examine the channels through which the trilemma policy configurations affect output volatility. Secondly, we investigate how trilemma policy configurations affect the...

In this paper I review the use of precautionary measures aimed at mitigating emerging markets' exposure to fragility associated with financial integration. The discussion draws possible lessons from the ongoing global liquidity crisis. The fear of losing international reserves (IR) constrained...

This paper explores the stability of the key conditioning variables accounting for real estate valuation before and after the crisis of 2008 - 2009, in a panel of 36 countries, for the period of 2005:I - 2012:IV, recognizing the incidence of global financial crisis. Our paper validates the...

We develop a new set of indexes of exchange rate stability, monetary policy independence, and financial market openness as the metrics for the trilemma hypothesis. In our exploration, we take a different and more nuanced approach than the previous indexes developed by Aizenman, Chinn, and Ito...

We present a theoretical framework for policy making based on the "impossible trinity" or the "trilemma" hypothesis. A simple optimization model shows that placing more weight in terms of preference for each of the three open macroeconomic policies - exchange rate stability, financial market...

The first decade of economic and monetary union in Europe (EMU) has been a huge success. EMU has significantly benefited its member countries and accelerated the European integration process. Imbalances within EMU - differences in growth, inflation, competitiveness, current account and budget...

European economic integration fascinates and inspires for the way it brought peace to a continent torn by violent and long-standing rivalries. The lessons from Europe, however, cannot be applied directly as the degree of the European Union's supranationality is unthinkable elsewhere. This paper...

There is a strong presumption among economists that domestic reforms are promoted by regionalism. Yet strong empirical evidence for this proposition is lacking. This paper examines both the theoretical arguments and empirical evidence on this issue, drawing on the relevant economic, political,...

This paper reviews the creation and evolution of the European Economic Monetary Union (EEMU) and discusses the insights and perspectives of the key lessons for Asian economic integration utilizing an extensive review of the literature method. In order to implement a common monetary and economic...