Invoicing currency and the optimal basket peg for East Asia: Analysis using a new open economy macroeconomic model |
| |
Authors: | Etsuro Shioji |
| |
Institution: | aHitotsubashi University, Japan |
| |
Abstract: | An important characteristic of trade in Asia is that the US dollar is the dominant invoicing currency. This fact might have a consequence on the region's choice of the currency regime. To investigate this possibility, I develop a three country “new open economy macroeconomics” model that consists of East Asia, Japan, and the US. Assuming that East Asia pegs its currency to a basket of the other two's currencies, the optimal basket weights are derived numerically. It is shown that the weights under a realistic invoicing pattern are drastically different from those in the textbook case of “producer currency pricing.” J. Japanese Int. Economies 20 (4) (2006) 569–589. |
| |
Keywords: | Exchange rate regime Currency basket Invoicing currency New open economy macroeconomics East Asia |
本文献已被 ScienceDirect 等数据库收录! |