Thispaper,liketheconferenceforwhichitwasprepared,isasequeltoanearliereffortdatingfrom1996.Inthatpreviouspaper(BayoumiandEichengreen,1999),twoofusevaluatedregionalmonetaryarrangementsforAsia,rangingfromacommonbasketpegtoasinglecurrency.Wesoughttomakethreepoints.First,AsiacomesaboutascloseasEuropedoestosatisfyingthestandardeconomiccriteriaforanoptimumcurrencyarea.Second,theessentialpreconditionsforadurableregionalarrangementarepoliticalratherthaneconomic,andbyalmostanymeasureAsiacomeslessclosethanEuropetomeetingthosepoliticalcriteria.Third,anymonetaryarrangementthatseekstostabilizeexchangeratesintheabsenceofthenecessarypoliticalpreconditionswillbefragileandcrisisprone.ThatpapercanthusbereadasawarningofthedangersofthetypeofcurrencypegsoperatedbyAsiancountriesinthefirsthalfofthe1990s,andasacritiqueofproposalsformovingtodeepermonetaryintegrationintheabsenceoftherequisitepoliticalcommitment.
|