Critical costs and benefits of creating an EMU-like structure in Asia are identified. Analyzing the EU, we pay particular attention to two kinds of economic benefits and costs that do not appear much in conventional economic analysis. First, there are benefits and costs of harmonization in different areas including the monetary area. Second, giving up sovereignty within a policy area can provide many countries with a kind of insurance against domestic institutional, legal, and political weaknesses. Although we emphasize economic arguments it is necessary to recognize that the EU is very much a politically motivated project. Politics may well be the biggest obstacle to an EMU-like monetary system in Asia. Conditions in Asia require consideration of alternatives to a monetary union since there exist disparate economic and political systems that may well prove impossible to fully integrate.
Khoury, S.J., & Wihlborg, C. (2008, Nov. 1). Lessons from the EMU for Asian regional integration. Journal of Asia Pacific Business, 9(1): 82-102. doi: 10.1080/10599230801971275
Taylor & Francis
This is an Accepted Manuscript of an article published in Journal of Asia Pacific Business, volume 9, issue 1, in 2008, available online: DOI: 10.1080/10599230801971275.