Exchange Rates under the East Asian Dollar Standard

by Ronald I. McKinnon

"The increasingly integrated economies of East Asia - China, Hong Kong, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, and Thailand - face the dilemma of how to achieve exchange-rate security in the absence of a unifying "Asian euro." The U.S. dollar has become the region's dominant intraregional trading currency as well as the monetary anchor to which East Asian economies informally peg their currencies. In this timely and original analysis of the benefits and risks of an East Asian dollar standard, Ronald McKinnon takes issue with the conventional view that urges flexible exchange rates on financially fragile economies. He argues instead that East Asian countries should coordinate their policies to keep their exchange rates stable against the dollar."--Jacket.