This paper examines the question of how to design an optimal and sustainable exchange rate regime in a world economy of two interdependent countries. It develops a Barro-Gordon type two-country model and compares noncooperative equilibria under different assumptions of monetary policy...

Deepening market-driven economic integration in East Asia makes intraregional exchange rate stability across the region increasingly desirable and necessary. This paper suggests that East Asia’s emerging economies begin with a currency basket system based on the G3 (US, Euro area and Japanese)...

With the rise of the People's Republic of China (PRC) as the world's largest trading nation (measured by trade value) and second largest economic power (measured by GDP), its economic influence over the neighboring emerging economies in East Asia has also risen. The PRC introduced some exchange...