The Asian Currency Unit, deviation indicators, and exchange rate coordination in East Asia: A panel-based convergence approach

Arbeitspapier

Employing the panel convergence method of Phillips and Sul (2007) to the nominal deviation indicators of two recent unofficial constructions of the Asian Currency Unit (ACU) index, this paper examines the existence and extent of convergence in the movements of East Asian currencies against the ACU. Empirical results reveal that intra-East Asian exchange rate movements have not converged to form a cohesive, unified bloc where currencies share homogenous movements, regardless of whether one examines the data on intra-East Asian exchange rate movements before or after the collapse of Lehman Brothers in September 2008. Instead, a separate number of convergent clubs or blocs in the region have formed in recent years. Finally, and most importantly, economies in the region are, generally, converging at different speeds to two opposing poles of convergence: groups of relatively depreciating currencies, and groups of relatively appreciating currencies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ADBI Working Paper ; No. 550

Classification and Topics

• Classification: Wirtschaft ; Foreign Exchange ; Financial Aspects of Economic Integration ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models
• Subject: Asian Currency Unit ; exchange rate movements ; currency blocs

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Pontines, Victor ; You, Kefei
• Event: Veröffentlichung
• (who): Asian Development Bank Institute (ADBI)
• (where): Tokyo
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/145398
• Last update: 10.03.2025, 11:43 AM CET