ABSTRACT
Asia’s emerging market economies are currently facing a menu of exchange rate and monetary regimes. The choice of a regime has an opportunity cost; some aspect of policy flexibility is lost by the decision. Recognising these costs, and so ensuring that macroeconomic policy is consistent, is fundamental to sustaining economic stability. This chapter contends that policy inconsistency was a central element of the East Asian crisis; that the move to sustainable macroeconomic policy regimes is still evolving; and that the regime menu raises tremendous policy and institutional challenges for East Asian economies.
