Yen Bloc or Yuan Bloc: An Analysis of Currency Arrangements in East Asia

Author/Editor: Shirono, Kazuko
Publication Date: January 01, 2009
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: This paper examines the role of Japan against that of China in the exchange rate regime in East Asia in light of growing interest in forming a currency union in the region. The analysis suggests that currency unions with China tend to generate higher average welfare gains for East Asian countries than currency unions with Japan or the United States. Overall, Japan does not appear to be a dominant player in forming a currency union in East Asia, and this trend is likely to continue if China's relative presence continues to rise in the regional trade.
Series: Working Paper No. 09/3
Subject(s): Exchange rate regimes | East Asia | Japan | China, People's Republic of | Currencies | Monetary unions | Trade | Economic cooperation | Economic models | Trade models | Data analysis

Author's Keyword(s): Japan | East Asia | Currency Union | Gravity Model
Publication Date: January 01, 2009
Format: Paper
Stock No: WPIEA2009003 Pages: 32
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