Pros and Cons of Joining a Currency Union: Japan Essays

Pros and Cons of Joining a Currency Union: Japan Essays

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Introduction
The goal of every economist and politician is to optimize the economy of their respective countries in a way that improves the global economy under limited resources.
Adopting a currency union is beneficial in many cases, but harmful in others. A currency union consists of multiple nations sharing a single form of currency, often comprised of a single market and a customs union. Participating countries may also affect one another’s economic/foreign policies.
As it is commonly known, Japan’s economy boomed after World War II. By the eighties, Japan went from having a low wage economy to one of the higher wage economies. However, within the next decade, the economy became stagnant. Even through large public works programs and increased internal money flow, prices remained deflated until the Bank of Japan purchased approximately seventy trillion yen worth of bonds and securities. As of recent, Japan has become a top exporter among the world’s open economies.
Japan’s financial system has been supported, using its own form of currency called the Yen. Joining a currency union has many risks and benefits associated with it. Not only would this union affect Japan, but it would greatly impact the entire region as well. In recent years, many Asian countries have favored a floating exchange rate rather than depending on a unified currency, which would make forming a currency union difficult. If this is true, how would joining a currency union impact Japan’s economy?
Data and Analysis
In 2012 Japan’s Gross Domestic Product was 5.96 billion U.S dollars, accounting for 9.61 percent of the world’s economy and making it the third largest economy in the world. The Gross Domestic Product annual growth was reported at 1 percent. With ...


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"Japan Balance of Trade." TRADING ECONOMICS. N.p., n.d. Web. 23 Apr. 2014.
http://www.tradingeconomics.com/japan/balance-of-trade
"Rates Table Converter 1.00 Japanese Yen Rates Table." Currency Exchange Table (Japanese Yen). N.p., n.d. Web. 23 Apr. 2014. http://www.x-rates.com/table/?from=JPY
"Reserve Bank of New Zealand." The Pros and Cons of Currency Union: A Reserve Bank Perspective. N.p., n.d. Web. 23 Apr. 2014. http://www.rbnz.govt.nz/research_and_publications/speeches/2000/0091114.html
Weisenthal, Joe. "Who Are Japan's Big Trading Partners, And What Do They Trade?" Business Insider. Business Insider, Inc, 22 Mar. 2011. Web. 22 Apr. 2014. http://www.businessinsider.com/who-are-japans-big-trading-partners-and-what-do-they- trade-2011-3

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