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Yen Bloc

Toward Economic Integration in Asia

C.H. Kwan

Publication Year: 2001

In this important new book, C.H. Kwan asks whether the Japanese yen can, or will, replace the dollar as the key currency in East Asia. Kwan analyzes the implications for Japan and Asia's developing countries should they come together to form a yen bloc —a grouping of countries that use the yen as an international currency and maintain stable exchange rates against the yen. Combining academic analysis with his experience advising the Japanese prime minister and the Japanese minister of finance, Kwan concludes that a yen bloc might benefit Asia's developing countries —as well as Japan —while contributing to a more stable international monetary order. Kwan's book represents the first attempt to explore systematically the possibility of monetary integration in Asia. It also provides a vision for regional integration in Asia in the twenty-first century.

Published by: Brookings Institution Press

Title Page

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Copyright Page

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Dedication Page

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Table of Contents

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pp. vii-ix

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pp. xiii-xv

Interest in the formation of a yen bloc has increased in recent years against a background of a deepening economic interdependence between Japan and its Asian neighbors and a growing recognition of the need to reform the prevailing international financial architecture. ...


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pp. xvii-xviii

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Chapter 1: Overview

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pp. 1-12

Interest in a yen bloc in Asia has been on the rise. This is happening against a background of growing recognition of the limitation of the Asian countries’ traditional exchange rate policy of pegging to the dollar, as revealed by the recent currency crisis in Asia; the implementation of Japan’s ambitious ...

Part One: The Economic Fundamentals Supporting a Yen Bloc

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pp. 13

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Chapter 2: The Rise of Regionalism in Asia

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pp. 15-37

The pattern of economic development in Asia during the postwar era has been likened to a flock of wild geese flying in formation. The development process began in Japan, with the Asian NIEs and, later, the ASEAN economies and China catching up from behind. ...

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Chapter 3: Deepening Japan-Asia Interdependence

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pp. 38-60

The trend toward deepening economic interdependence in Asia has accelerated since the global realignment of exchange rates in the latter half of the 1980s. The increase in foreign direct investment among Asian countries and the integration of China into the regional economy have boosted intraregional trade ...

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Chapter 4: Asia in Search of a New Exchange Rate Regime

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pp. 61-82

In the summer of 1997, amid intense currency attacks by speculators, many developing Asian countries were forced to abandon their traditional dollar peg system and allow their exchange rates to float. After a period of sharp depreciation accompanied by high volatility, in the autumn of 1998 exchange rates ...

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Chapter 5: Revitalizing the Japanese Economy

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pp. 83-106

The 1990s will be remembered as Japan’s lost decade, with economic growth lagging far behind not only the high level it achieved in the past but also that of other major industrial countries. Several factors contributed to the stagnation of the Japanese economy during this period. ...

Part Two: Forming a Yen Bloc in Asia

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pp. 107

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Chapter 6: A Japanese Perspective

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pp. 109-127

My study of the possibility of forming a yen bloc from a Japanese perspective focuses on the implications for Japan itself of forming a monetary union with Asia.1 If the benefits exceed the costs, then Japan would be likely to pursue it as a policy objective and try to remove barriers hindering its realization. ...

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Chapter 7: An Asian Perspective

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pp. 128-150

A yen bloc would not be formed to suit only Japan’s own interest. To deepen understanding of the issue, we need to add the perspective of the Asian countries, which would be potential members of the bloc.1 Pegging exchange rates closer to the Japanese yen should contribute to macroeconomic stability ...

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Chapter 8: A Regional Perspective

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pp. 151-174

The theory of optimum currency areas considers which countries should come together to form a monetary union. When applied to the possibility of monetary integration in Asia centering upon Japan, it provides a regional perspective of a yen bloc.1 ...

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Chapter 9: A Global Perspective

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pp. 175-196

So far I have examined the yen bloc from the perspectives of Japan itself, of Asia’s developing countries, and of the Asian region as a whole, but the analysis would be incomplete without a discussion of its implications for the world economy. Analogous to the relations between regionalism and globalism widely discussed ...


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pp. 197-204


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pp. 205-214

E-ISBN-13: 9780815798705
E-ISBN-10: 0815798709

Page Count: 232
Publication Year: 2001