List of Papers for this Meeting
44th Annual Meeting
Bangko Sentral ng Pilipinas Assembly Hall
November 21 - 22 2006
Theme: Growth, Development, and Institutions
Paper Details
| Panel: |
Session 1: Monetary Policy (1) |
| Title: |
Paper 3: Can Asia have One Currency? An Assessment Based on Macroeconomic Fluctuations and Revealed Policymaker Preferences |
| JEL Code(s): |
E5 |
| Abstract: |
This paper assesses the suitability of Asian countries to a monetary union based on synchronicity of economic shocks and sources of macro fluctuations as well as on revealed policymaker preferences. Results based on shock correlations show that a single currency is feasible for only a few groups of countries bonded by common geographic origins – mainly, economies of North Asia and certain members of Southeast Asia. There is moderate degree of symmetry of economic disturbances overall, with macro fluctuations stemming from sizeable global and possibly regional components. Asia as a whole does not face large shocks and recovers swiftly from disturbances. Complementary results are obtained based on revealed policymaker preferences for output and inflation variability. Estimated inflation aversion parameters are not very widely dispersed, with most Asian central banks having medium to high degrees of aversion to inflation volatility.
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| Discussants: |
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