Stabilization of effective exchange rates under common currency basket systems
By: Eiji Ogawa, Junko Shimizu
Contributors: Shimizu, Junko; National Bureau of Economic Research
Series: NBER working paper series -- working paper 12198; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 12198.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "We investigate the extent to which a common currency basket peg would stabilize effective exchange rates of East Asian currencies.  We use an AMU (Asian Monetary Unit), which is a weighted average of ASEAN10 plus 3 (Japan, China, and Korea) currencies, as a common currency basket to investigate the stabilization effects.  We compare our results with another result on stabilization effects of the common G3 currency (the US dollar, the Japanese yen, and the euro) basket in the East Asian countries (Williamson (2005)).  We obtained the following results: first, the AMU peg system would be more effective in reducing fluctuations of the effective exchange rates as more countries applied the AMU peg system in East Asia.  Second, the AMU peg system would more effectively stabilize the effective exchange rates than a common G-3 currency basket peg system for four (Indonesia, the Philippines, South Korea and Thailand) of the seven countries.  The results suggest that the AMU basket peg would be useful for the East Asian countries whose trade weights on Japan are relatively higher than others"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 5/24/2006.

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.