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The Asian Currency Unit, Deviation Indicators, and Exchange Rate Coordination in East Asia: A Panel-Based Convergence Approach

The Asian Currency Unit, Deviation Indicators, and Exchange Rate Coordination in East Asia: A Panel-Based Convergence Approach

Pontines, Victor and You, Kefei ORCID: 0000-0001-7253-5838 (2015) The Asian Currency Unit, Deviation Indicators, and Exchange Rate Coordination in East Asia: A Panel-Based Convergence Approach. [Working Paper] (Unpublished)

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Abstract

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.

Item Type: Working Paper
Uncontrolled Keywords: ASEAN + 3 and Hong Kong, China Asian currency unit Nominal deviation indicators Panel convergence test
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
H Social Sciences > HG Finance
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of Accounting & Finance
Last Modified: 27 Feb 2019 16:01
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: None
URI: http://gala.gre.ac.uk/id/eprint/21415

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