Does Asia Need a Common Currency?

Abstract

There are five key elements in the world economy today that need to be addressed in setting the background for evaluating currency area prospects. One is the New Economy. The New Economy underlies the big change in the United States that made possible a sudden jump--up from a two and a half percent average sustainable growth rate that most economists thought was the maximum, to something in the order of 5% growth rate, temporary as it may have been. The IT revolution is affecting every aspect of our life. With a little exaggeration I could say that it is like a combination of the electricity revolution and the printing revolution at the same time. It is very equalising because it lowers the cost of technology and other types of knowledge—one of the most scarce factors of production in poor countries-all over the world. For the poor countries that have sufficient education to access it, it will enable them to tap sources of knowledge and information that offer new hope for prosperity.