How Does the Regional Monetary Unit Work as a Surveillance Tool in East Asia?
Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)
To utilize the Chiang Mai Initiative Multilateralization (CMIM) for crisis management, macroeconomic surveillance of the member economies should be ex-ante conditionality. Hence, the Association of Southeast Asian Nations (ASEAN) plus Three Macroeconomic Research Office (AMRO) was established to detect possibilities of economic crises and to prompt the restructuring or reforming of a rigid structure or system. Although monitoring the exchange rates of the currencies of these countries vis-à-vis the U.S. dollar is essential for surveillance, the AMRO should have an original tool to consider region-specific factors and more efficient tools than the International Monetary Fund (IMF) surveillance. Therefore, this paper proposes utilizing a regional monetary unit (RMU) in monitoring exchange rates. Empirical analysis has confirmed that deviation indicators of RMUs such as the Asian Monetary Unit Deviation Indicators (AMU DI) are expected to be useful for macroeconomic surveillance. This paper also tries to define the country's equilibrium exchange rate vis-à-vis a RMU to provide useful statistical information about exchange rate misalignments among East Asian currencies by employing the permanent-transitory decomposition proposed by Gonzalo and Granger (1995).
Pages: 50 pages
New Economics Papers: this item is included in nep-mon and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:13026
Access Statistics for this paper
More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().