Abstract
A study of a coordinated monetary and economic policy for the Asia-Pacific region has long been debated. Institutionalization of the Asia-Pacific Economic Cooperation (APEC) occurred in 1989. In 1999 APEC membership had risen to 21 sovereign nation-state member economies. Annual meetings of finance ministers and heads of central banks of APEC member economies have been a regular feature, pointing to the fact that a supranational macroeconomic core, well-defined by monetary or fiscal policy guidelines alone could contribute to the success of APEC agenda of intraregional free trade, free flow of investment, and then free flow of human capital. Inauguration of the euro and European Central Bank on January 1, 1999, presents a learning model for economic regionalization in the Asia-Pacific. Hence, we propose to study the economic rationale of institutionalization of the Asia-Pacific Monetary Union with an optimal and transparent agenda for intraregional monetary policy coordination in terms of both supply of aggregate stock of money and determination of the intraregional core rate of interest, supplemented by intraregional fiscal policy coordination, which can and will provide the necessary and sufficient conditions for intraregional free market with free flow of trade, investment and human capital, contributing to the maximization of economic gains for all microeconomic actors—households as well as business corporations—belonging to all intraregional sovereign nation-state macroeconomies. This regional arrangement in the Asia-Pacific work within the framework of global institutions, thus optimally harmonizing regionalism with globalism. I have argued that the core of newly emerging economic regionalization relates to (1) a map-of-the-world view of the region, and (2) an intraregional, multilateral cooperative effort to map an economic region with well-specified micro- and macroeconomic parameters on to a specific geographic region.
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