Prospect for Monetary Integration in Asia and the Pacific and the Role of Japan

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The most important theoretical framework for currency and monetary integration is "the theory of the optimal currency area" initiated by Robert Mundel. He and many scholars following him presented various criteria for the optimal currency area, such as (i) confluence of IS shocks, (ii) openness of the national economy, and (iii) factor mobility (both capital and labor).The present research project has investigated the preconditions for monetary integration and cooperation in Asia and the Pacific, putting an emphasis on the labor mobility in the region.In addition to writing academic papers, I visited the international organizations, such as the World Bank and the Inter-American Development Bank, to discuss the issue with experts there.Major findings of the research project are as follows:(i) The degree of labor market integration in Asia and the Pacific is less than those in Europe and America, but it has been rapidly increasing.(ii) The increasing degree of the labor market integration benefits the monetary integration and cooperation in the region.(iii) However, the international flow of "people" often involves negative social impact on both receiving and sending countries. Therefore, various social policies are needed to accommodate foreign workers in order to further increase labor market integration in the region.