The Asian Currency Unit, Deviation Indicators, and Exchange Rate Coordination in East Asia: A Panel-Based Convergence Approach

Victor Pontines and Kefei You
Additional contact information
Kefei You: Asian Development Bank Institute

No 550, ADBI Working Papers from Asian Development Bank Institute

Abstract: Employing the panel convergence method of Phillips and Sul (2007) to the nominal deviation indicators of two recent unofficial constructions of the Asian Currency Unit (ACU) index, this paper examines the existence and extent of convergence in the movements of East Asian currencies against the ACU. Empirical results reveal that intra-East Asian exchange rate movements have not converged to form a cohesive, unified bloc where currencies share homogenous movements, regardless of whether one examines the data on intra-East Asian exchange rate movements before or after the collapse of Lehman Brothers in September 2008. Instead, a separate number of convergent clubs or blocs in the region have formed in recent years. Finally, and most importantly, economies in the region are, generally, converging at different speeds to two opposing poles of convergence: groups of relatively depreciating currencies, and groups of relatively appreciating currencies.

Keywords: Asian Currency Unit; exchange rate movements; currency blocs (search for similar items in EconPapers)
JEL-codes: C33 F31 F36 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2015-12-08
New Economics Papers: this item is included in nep-mon and nep-sea
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.adb.org/sites/default/files/publication/175958/adbi-wp550.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbiwp:0550

Access Statistics for this paper

More papers in ADBI Working Papers from Asian Development Bank Institute Kasumigaseki Building 8F, 3-2-5, Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan. Contact information at EDIRC.
Bibliographic data for series maintained by ADB Institute ().