The Suitability of ASEAN for a Regional Currency Arrangement

Abstract:     
This paper examines the costs, benefits, preconditions, and implications of an Association of Southeast Asian Nations (ASEAN) regional currency arrangement that is assumed to culminate in a regional currency. On economic criteria, ASEAN appears less suited for a regional currency arrangement than Europe before the Maastricht Treaty, although the difference is not large. The transition to European Monetary Union (EMU) indicates that the path toward a common currency is fraught with difficulty. A firm political commitment would seem to be vital to ensuring that an attempt to form a regional currency arrangement is not viewed as simply another fixed exchange rate regime, open to speculative crises.

Number of Pages in PDF File: 24

Keywords: ASEAN, EMU, exchange rates

JEL Classification: F33, F36, F41, F42

working papers series