The future creation of a region-wide economic agreement in Asia has become the hot issue among trade policymakers in the region. The APEC 2010 Summit Statement clearly states that the members should pursue a Free Trade Area of the Asia-Pacific (FTAAP), building on various ongoing regional...

This paper asks how Asia should prepare for the disorderly correction of global imbalances. It recommends tightening monetary policy and allowing Asian currencies to appreciate as a way of achieving a better balance between internal and external demand. Leaving the overall level of demand...