Economic integration and prospects for regional monetary cooperation in East Asia

The recent Asian currency crisis and the launch of the euro have stirred much interest in regional monetary cooperation in East Asia. This paper discusses the rationale and chances for such cooperation. It is argued that, although regional incentives are not strong enough and the political prerequisites for monetary unification are not yet given, almost all economic indicators suggest that East Asian countries are ready for cooperation on economic grounds. Various proposals and institutional initiatives are examined and shown to be either insufficient to cope with currency crises or too limited in their objectives.