In this important new book, C.H. Kwan asks whether the Japanese yen can, or will, replace the dollar as the key currency in East Asia. Kwan analyzes the implications for Japan and Asia's developing countries should they come together to form a yen bloc—a grouping of countries that use the yen as an international currency and maintain stable exchange rates against the yen. Combining academic analysis with his experience advising the Japanese prime minister and the Japanese minister of finance, Kwan concludes that a yen bloc might benefit Asia's developing countries—as well as Japan—while contributing to a more stable international monetary order. Kwan's book represents the first attempt to explore systematically the possibility of monetary integration in Asia. It also provides a vision for regional integration in Asia in the twenty-first century.

As Japan's newfound economic power leads to increased political power, there is concern that Japan may be turning East Asia into a regional economic bloc to rival the U.S. and Europe. In Regionalism and Rivalry, leading economists and political scientists address this concern by looking at three central questions: Is Japan forming a trading bloc in Pacific Asia? Does Japan use foreign direct investment in Southeast Asia to achieve national goals? Does Japan possess the leadership qualities necessary for a nation assuming greater political responsibility in international affairs? The authors contend that although intraregional trade in East Asia is growing rapidly, a trade bloc is not necessarily forming. They show that the trade increase can be explained entirely by factors independent of discriminatory trading arrangements, such as the rapid growth of East Asian economies. Other chapters look in detail at cases of Japanese direct investment in Southeast Asia and find little evidence of attempts by Japan to use the power of its multinational corporations for political purposes. A third group of papers attempt to gauge Japan's leadership characteristics. They focus on Japan's "technology ideology," its contributions to international public goods, international monetary cooperation, and economic liberalization in East Asia.

The role of the Japanese yen as an international currency is assessed. It is found that the determinants of international-currency use imply some increase for the yen’s use in international finance; however, the implications for the yen’s use in international trade are mixed. It is also shown that, despite Japan’s emergence as the world’s largest net creditor nation, Japan’s capital outflows have not significantly facilitated the yen’s internationalization. Data are presented showing that, although the yen’s use as an international currency has increased, it is still rather modest. Wider use of the yen as a regional currency in Asia has occurred, though a “yen-zone” does not appear to be emerging.

The formation of the yen bloc did not result in the economic and monetary integration of East Asian economies. Rather, it led to the increasing disintegration of East Asian economies. Compared to Japan, Asian regions and countries had to suffer from higher inflation. In fact, the farther the countries were away from Japan, the more their central banks had to print money and the higher their inflation was. Moreover, the income gap between Japan and other Asian countries widened. This means that the regionalization centered on the Japanese yen was destined to fail, suggesting that the Co-prosperity Area was nothing but a strategy of regional dominance, not of regional cooperation. The impact was quite long lasting, and it still haunts East Asian countries, contributing to the nourishment of their distrust vis-à-vis Japan, and throws a shadow on recent monetary and financial cooperation movements in East Asia. This experience highlights the importance of responsible actions on the part of leading countries to boost regional solidarity and cohesion for the viability and sustainability of a regional monetary system.

As Asia grows and prospers, its economies are increasingly vital to each other -and to the world. Led by a team of ADB staff, scholars, and advisers to regional policy makers, this study highlights what is at stake the emerging Asian regionalism and lays out the ground for further discussion on how to move forward.

This volume explores East Asia's macroeconomic experience in the 1980s and the economic impact of East Asia's growth on the rest of the world. The authors explore the causes of capital flows, changes in trade balances, and exchange rate fluctuations in East Asia and their effects on other countries. These fourteen papers are organized around four themes: the overall determinants of growth and trading relations in the East Asian region; monetary policies in relation to capital controls and capital accounts; the impact of exchange rate behavior on industrial structure; and the potential for greater regional integration. The contributors examine interactions among exchange rate movements, trade balances, and capital flows; how government monetary policy affects capital flows; the effect of exchange rates on industrial structure, inventories, and prices; and the extent of regional integration in East Asia.

The Oxford Handbook of the Ends of Empire offers the most comprehensive treatment of the causes, course, and consequences of the collapse of empires in the twentieth century. The volume's contributors convey the global reach of decolonization, analysing the ways in which European, Asian, and African empires disintegrated over the past century.

Using the gravity model to examine bilateral trade patterns throughout the world. we find clear evidence of trading blocs in Europe. the Western Hemisphere, East Asia and the Pacific. In Europe, it is the EC that operates as a bloc, not including EFTA. Two EC members trade an extra 55 per cent more with each other. beyond what can be explained by proximity, size. and GNP/capita. We also find slight evidence of trade-diversion in 1990. Even though the blocs fall along natural geographic lines. they may actually be "super-natural." Turning to the possibility of currency blocs, we find a degree of intra-regional stabilization of exchange rates, especially in Europe. Not surprisingly. the European currencies link to the OM. and Western Hemisphere countries peg to the dollar. East Asian countries, however, link to the dollar. not the yen. We also find some tentative cross-section evidence that bilateral exchange rate stability may have a (small) effect on trade. A sample calculation suggests that if real exchange rate variability within Europe were to double, as it would if it returned from the 1990 level to the 1980 level, the volume of intra-regional trade might fall by an estimated 0.7 per cent.