296 Bayoumi, Eichengreen and Mauro (2000: 147)

**297** Goto and Hamada (1994), Eichengreen and Bayoumi (1999), Benassy-Quere<sup>(1999), Kawaiand</sup> Akiyama (2000), and Bayoumi, Eichengreen and Mauro (2000). **298** Kawai and Takagi (2000: 25) **299** Some advocates of this regime are Dombusch and Park (1999), Murase (2000),<sup>Williamson (1999,</sup> 2000, 2001), Ogawa and Ito (2000), and Kawai and Takagi (2000). **300** De Brouwer (2002: 299) says that the evidence is mixed conceming the adverse<sup>effectof currency</sup> volatility on economic performance. **301** Kawai and Takagi (2000)

**302** Favored by Dombusch and Park (1999) and Williamson (1996, 2000, and<sup>2001), amongothers.</sup> **303** "The 'effective exchange rate' is the weighted-average exchange<sup>rate againstallcurrencies,wherethe</sup> weights are generally chosen to reflect the pattem of trade. (An alternative<sup>weighting system, basedon</sup> trade elasticities, recognizes that countries are also important competitors,<sup>rather than just tradepartners.) A</sup> 'real effective exchange rate' corrects for changes in relative inflation so<sup>that theindex doesnot change if</sup> prices increase as much at home as the weighted average of the country's<sup>trading partners." (Williamson,</sup> 2001: 97)

304 Kwan (2001) and Williamson (2001) **305** Williamson (2001: 98) **306** Ogawa and Ito (2000) suggest that publishing a "typical<sup>currencybasketunit" (or ACU)for the region</sup> could be helpful to each country in calculating its own basket. 307 Kawai and Takagi (2000: 25-26)

**308** De Brouwer (2002: 292). The author bases his analysis on trade data for 1995-97.<sup>Intermsof</sup> intraregional trade share for 1998-2000, as presented earlier in this study, the proportion<sup>has dropped</sup> slightly but is still close to half.

**309** Again, de Brouwer bases his analysis on trade data<sup>for 1995-97.Our datafor 1998-2000reflectssome</sup> changes in trade pattems for East Asian countries. Although<sup>itis stillthe casethatCambodia,LaoPDR and</sup> Vietnam trade more with other countries in the region than<sup>with theU.S.,Japan and EU,comparedto the</sup> earlier period Cambodia now exports more to the<sup>U.S.than the EUbut still littleto Japan,LaoPDR's share</sup> of exports to the EU has halved while that to Japan is<sup>nearlyfive times greater,and Vietnam'sshareof</sup> exports to Japan has dropped considerably while<sup>tradeshareswith theU.S.and EUare relatively</sup> unchanged.

**310** The EC signed the Baste Agreement in 1972 which reduced the<sup>bilateral fluctuationmarginsof its</sup> member nations' currencies to +/-2.25 percent (the snake) against the wider world of<sup>4.5percent(the</sup> tunnel). This became known as the 'snake in the tunnel' (or European Common<sup>MarginsAgreement).</sup> While the European currencies would continue to fluctuate against the dollar<sup>and other currencieswithin</sup> the wider band, intra-European fluctuations would be decreased. The tunnel<sup>disappeareda yearlater when</sup> the dollar was floated. This left the "snake" as a joint float. Aldcroft and Oliver<sup>(1998: 146-150)and</sup> Rehman (1997: 14-17)

**311** Wyplosz (2001a: 130)

**312** Wyplosz (2001a) identifies the European Commission and the<sup>ECB(European Central Bank)asthetwo</sup> main institutions today. He does not downplay the shortcomings of these institutions<sup>andthe many</sup> difficulties they face in carrying out their functions, but states<sup>thattheir existence hasbeen "crucial"and</sup> "they embody the principle of a common good and common aims which<sup>transcend national interestsand</sup> objectives." Wyplosz (2001 a: 140)

"' Tay (2000b: 159-60) and Soesastro (2000a: 192) **314** Urata (1998)

**315** Wyplosz (2001a: 140)

**316** Wyplosz (2001a: 140)

**317** Kartadjoemena (2001: 210-211) **318** Stiglitz (2001a: 523) **319** Eichengreen (2001: 43) **320** Park et al (2001)

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