GUATEMALA CITY -- Following the experiences of the European Union's euro zone, a common currency area for Asia has been widely discussed. Even though an Asian monetary union is a fantasy that ignores both economic and political realities, respectable economists have bought into the idea.
For example, professor Robert Mundell, a Nobel laureate in economics, has made statements in support of the creation of an Asian monetary union. Citing exchange-rate volatility between the Japanese yen and the dollar as a problem for Asian economies, he suggested introducing a common currency area patterned on the euro zone.
A private study group of the International Bureau of the Japanese Finance Ministry has promoted the idea of a unified currency for Asia. Unsurprisingly, it begins with a plan for greater use of the yen in transactions in the region. The final report of the Study Group for the Promotion of the Internationalization of the Yen indicated that a unified currency would increase financial and economic cooperation among the 10-member Association of Southeast Asian Nations countries plus Japan, China and South Korea.