There is a deepening debate in East Asia about the prospects for common exchange rate arrangements, even including the formation of a common currency in the longer term. This raises a complex set of issues and this volume provides a detailed yet comprehensive examination of key issues in the debate. It looks, for example, at the nature and extent of linkages in East Asia, in terms of trade and foreign investment, finance, labour, and consumption, investment and output. It examines how the exchange rate affects various aspects of economies. And it critically analyzes various proposals for currency regimes for the region, including floating exchange rates, basket pegs, and currency union.

List of figuresList of tables and boxesList of contributorsPrefaceAbbreviations1. Economic Linkages and Implications for Exchange Rate Regimes in East Asia2. Trade and Foreign Direct Investment in East Asia 3. 'Reveal Commonality': Linkages in consumption, investment and output in East Asia 4. A Multivariate Approach to Grouping Financially Integrated Economies 5. International Migration and Trade Liberalisation: Some lessons from Asia 6. Patterns, Economic Implications and Policy Issues in International Labour Migration 7. Exchange Rate Pass-Through to Export Prices 8. The Effects of Exchange Rate Volatility on Trade 9. The Cost of Crises and Learning to Live with Exchange Rate Volatility: Evidence from survey measures of consumer business expectations 10. Measuring Real Effective Exchange Rates 11. Exchange Rate Regimes and Monetary Independence in East Asia 12. 'Fair Value' and Exchange Rate Misalignment 13. The Narrow Road to the Single Asia Currency: lessons from optimal currency areas and the euro 14. The Case for a Tri-polar Currency Basket System for Emerging East Asia 15. Which Exchange Rate Regime for Asia? 16. Options for Currency Arrangements and their Policy Implications 17. Sequencing Monetary and Trade Integration