When analyzing the appropriate response for monetary policy during a currency crisis, it is important to keep in mind two distinct channels: the effect of raising interest rates on exchange rates and the direct effect of exchange rate changes on output. The first pertains to the monetary side of...

When analyzing the appropriate response for monetary policy during a currency crisis it is important to keep in mind two distinct channels: (a) the impact of raising interest rates on exchange rates; and (b) the direct impact of exchange rate changes on output. The first pertains to the monetary...

The collection of essays in this volume explores various aspects of monetary, trade, and investment issues in India. These are analysed in the context of India's integration with the global economy, especially India's growing trade and investment links with East Asia. The book is divided into...

There has been much interest in understanding various dimensions of the growth and integration of emerging Asia with the rest of the world, particularly with regard to international capital flows and external financing. Nonetheless, serious academic work in this area has lagged somewhat compared...

While most observers concur that the time is not ripe for Asia to consider a common currency, there has been some discussion about the possible creation of an Asian Currency Unit (ACU). This paper examines the specific issue of the ACU which, in a general sense, is a weighted average of regional...

India's foreign exchange reserves have risen rapidly since the balance-of-payment crisis in 1991 to over US$155 billion by mid-2006. India is now the fifth largest Asian reserve holder. Despite this, scant attention has been paid to the rationale for and impact of reserves accumulation in India....

Though there has been much general debate recently about the pros and cons of capital controls, there remains substantial confusion and uncertainty about what exactly is entailed by the term restraining global capital flows. Popular discussion around this has typically been long on rhetoric and...

This paper revisits the issue of exchange rate regimes in emerging Asia. It is divided into two main parts. The first part compares de jure and de facto exchange rate regimes in Asia over the decade 1999–2009. The second part focuses on the sustained stockpiling of reserves in developing and...

One of the more important concepts in open macroeconomics is the “equilibrium real exchange rate” (ERER). Real exchange rate misalignments are argued to have been the cause of loss of competitiveness and growth slowdowns and eventual currency crises (in the event of sustained...

This paper presents an analysis of the degree of de facto exchange rate flexibility in the exchange rate regimes for selected emerging Asian economies over the decade 1999-2009. While the propensity for foreign exchange intervention and exchange rate management among regional central banks...