With the rise of the People's Republic of China (PRC) as the world's largest trading nation (measured by trade value) and second largest economic power (measured by GDP), its economic influence over the neighboring emerging economies in East Asia has also risen. The PRC introduced some exchange...

The results highlight the conflicting interests of countries — to stabilize exchange rates or to keep the option of exchange rate depreciation in order to maintain competitiveness of domestic tradable producers. With deepening integration in East Asia, however, the desire for exchange rate...

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...

Japan’s “two lost decades” perhaps represent an extreme example of a weak recovery from a financial crisis, and are now referred to as “Japanization.” More recently, widespread stagnation in advanced economies in the wake of the global financial crisis led to fears that Japanization...

The paper discusses the financial landscape of the Association of Southeast Asian Nations (ASEAN), a region engaged in building an economic community (a “single market and production base”) by 2015. In particular, it reviews where ASEAN’s financial markets and institutions now stand and...

This paper evaluates the prospects for the renminbi’s role as an international currency and the implications for global financial markets. Although the People’s Republic of China (PRC) does not have either an open capital account or a flexible exchange rate, the renminbi has attained...

This paper presents 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,...

Infrastructure connectivity in Northeast Asia—comprising the northeastern People’s Republic of China, Japan, the Democratic People’s Republic of Korea, the Republic of Korea, Mongolia, and the Russian Far East—has been hindered by limited intergovernmental cooperation. The paper finds...

Since the 1980s, emerging countries have been urged to welcome foreign capital inflows. The result has often been a pattern of surges, where excessive inflows were followed by damaging “sudden stops” and reversals. What is needed is a strategy that makes use of the potential benefits of...

This paper examines the statistical nature of the persistency of current account balances and its determinants. With the assumption that stationary current account series ensures the long-run budget constraint while countries may experience “local non-stationarity” in current account...