Study On Choosing The Proper Exchange Rate System In Eastern Asian Currency Cooperation

At present, the building Eastern Asian economic integration goes with the tide ofregional economic integration and becomes the focus of attention. Eastern Asiancountries or areas does not copy the European economic integration model completely,but adopts the model of simultaneous economic integration and financial integration.And the Eastern Asian currency cooperation now stands on the middle of theinternational stage due to international currency structure reforming to balance thecontrastive power of international currencies and keep financial stability. Nowadaysthere are three important regional economic groups----EU, the North American FreeTrade Area and the Asian economic region. EU and the North American Free TradeArea have built their own regional currency system. However, the Asian region is stillin the state of disunity. The ponderous shock of the Asian financial crises made theEastern Asian countries or areas wake up soberly to the importance of regionalcurrency cooperation. Regional currency cooperation as a dynamic procedure has thelong-term and gradual features. Therefore, Asian currency cooperation should followthe rule from primary stage to the advanced stage. This thesis mainly focuses on theexchange rate system in the near future, due to the tremendous differences in politics,social, historical and financial aspects between Asian countries and areas. The author describes the background and the latest development of EACC andthe contents in different stages in chapter one, and discusses the theoretical bases tochoose the proper exchange rate system in chapter two. In chapter three, the authormainly examines the actual conditions of eastern Asia by demonstration and construesthe dilemma for developing countries when choosing a proper exchange rate system.And the analysis results show the disharmonization between the heavily relying onAmerican dollar in currency and relying on Japan in economy and trade. In thefollowing chapter four, the author studies the realistic choice of eastern Asianexchange rate system by qualitative analysis and quantitative analysis compositively.And in the quantitative analysis procedure, game theory is the main research tool. Theauthor exercises the Cournot Model to solve the equation for Nash Equilibrium underthe in-cooperative and cooperative situations. And at the last chapter, the authorevaluates the eastern Asian currency cooperation model, Chinese status and actions in IIEACC and brings forward some suggestions for China to participate in EACC.