We show that the negative correlation between foreign and domestic savings arises from the non-stationarity of these variables. We propose a more appropriate technique for testing a causal relation such as the one claimed by the revisionist view.

Recently currency instability and its economic and social consequences prompt the question whether and to what extent a common currency could have served to prevent or meliorate the Asian crisis. This paper examines the advantages and costs of such a proposal, using the experience and...