Possibilities and Scopes of International Monetary Cooperation in East Asia

• Project/Area Number: 14530105
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Single-year Grants
• Section: 一般
• Research Field: Public finance/Monetary economics
• Research Institution: Hitotsubashi University
• Principal Investigator: OGAWA Eiji Hitotsubashi University, Graduate School of Commerce and Management, Professor, 大学院・商学研究科, 教授 (80185503)
• Project Period (FY): 2002 – 2003
• Project Status: Completed (Fiscal Year 2003)
• Budget Amount: ¥2,700,000 (Direct Cost: ¥2,700,000); Fiscal Year 2003: ¥1,400,000 (Direct Cost: ¥1,400,000); Fiscal Year 2002: ¥1,300,000 (Direct Cost: ¥1,300,000)
• Keywords: exchange rate system / exchange rate policy / common currency basket / international policy coordination / dollar peg system / currency basket system / optimum currency area / generalized purchasing power parity

Research Abstract

This research project investigated international monetary cooperation in East Asia by focusing on coordination failure in adopting exchange rate systems for rebuilding a robust international financial system. It is necessary to adopt a common currency basket system in East Asian countries for solving the coordination failure. This research project used a "generalized purchasing power parity model" that help us to conduct empirical analysis about an optimum currency area with explicitly introducing anchor currency. The error correction model was used to investigate stationarities of exchange rates of East Asian currencies in terms of currency baskets of the US dollar, the Japanese yen, and the euro.
I made presentation of the analytical results in some international conferences (ANU Conference @Kuala Lumpur, 27-28 March, 2003 ; APEF Conference @Tokyo, 19-20 September, 2003 ; KIEP seminar @Seoul, 3 November, 2003 ; Asian Crisis V Conference @Chuncheon, 9 December, 2003) to refine the analytical methodology. I made a policy proposal from the analytical results based on the generalized purchasing power parity model : It is proposed that the monetary authorities in East Asian countries should create a common currency basket with an optimal basket weights in order to participate in a regional monetary cooperation for many of East Asian countries.

Research Products

• [Publications] Ogawa, Eiji, Kentaro Kawasaki: "Possibility of Creating a Common Currency Basket for East Asia"JBIC Institute Discussion Paper. 5. (2003)
  • Description: 「研究成果報告書概要(和文)」より
• [Publications] Ogawa, Eiji, Kentaro Kawasaki: "What should be weights on the three major currencies for a common currency basket in East Asia?"Hi-Stat Discussion Paper. 6. (2003)
  • Description: 「研究成果報告書概要(和文)」より
• [Publications] Ogawa, Eiji, Kentaro Kawasaki: "Possibility of Creating a Common Currency Basket for East Asia"JBIC Institute Discussion Paper. No.5. (2003)
  • Description: 「研究成果報告書概要(欧文)」より
• [Publications] Ogawa, Eiji, Kentaro Kawasaki: "What should be weights on the three major currencies for a common currency basket in East Asia?"Hi-Stat Discussion Paper. No.6. (2003)
  • Description: 「研究成果報告書概要(欧文)」より
• [Publications] Ogawa Eiji, Kentaro Kawasaki: "Possibility of Creating a Common Currency Basket for East Asia"JBIC Institute Discussion Paper. 5. (2003)
• [Publications] Ogawa Eiji, Kentaro Kawasaki: "What should be weights on the three major currencies for a common currency basket in East Asia?"Hi-Stat Discussion Paper. 6. (2003)
• [Publications] Eiji Ogawa, Kentaro Kawasaki: "Possibility of Creating a Common Currency Basket for East Asia"Proceedings on International Symposium on China's Economic Development and Structural Change in East Asian at Kyoto University. forthcoming. (2003)