Challenges to Economic Cooperation
Chapter 2: Historical Profiles of Economic Regionalization
Page 11 2 Historical Profiles of Economic Regionalization Economic regionalization has a history of its own. PreWorld War II economic regionalization was rooted into specific currency regimes, established under various imperial orders. Historical events dictated economic ties of most AsiaPacific economies to one or another currency regime: the British pound sterling, the French franc, the Dutch guilder, the U.S. dollar and the Japanese yen—each played the role of an anchor currency in its respective regional sphere of dominance. It was the colonial mold of economic regionalization, wherein monetaryfiscal policies, designed by home governments of the respective currency regimes, provided a macroeconomic core for microeconomic agents in the respective “satellite” economies. Its agenda was not to establish a supranational macroeconomic core for a specific economic region in a geographically common economic space. Rather, a supernational and superpower hegemony of monetary and fiscal discipline became manifest. Thus, the concept of economic regionalization, as known earlier in its preWorld War II manifestation, centered on currency regions, authoritatively established in a given sphere/space of political domination. Indeed, this historically explained a strong economic tieup, contributing to the growth of intraregional trade and investment flows among distant lands in a given currency region in a superpower regime. This mode of intraregional economic bonds united the Netherlands and Indonesia, the United Kingdom and a host of economies in Southeast and South Asia, plus Australia and New Zealand, France and Indochina, Japan and several East Asian economies, the United States and...
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