7 - East Asian Money

Summary

Chapter 7 introduces students to the monetary and financial dimensions of East Asian international relations, which are fragmented regionally while tied closely with the Western-dominated monetary order. Monetary power is arguably as important as military power, but it is not well understood and not commonly included in an IR textbook. As a social construction, monetary and financial power are related to but not equivalent to productive power. East Asia does not stand in isolation, because its contemporary monetary and financial practices and theories are integrated into the global system. Thus, this chapter examines U.S. dollar hegemony. Following a broader discussion of the exchange-rate regimes adopted by East Asian nations, the chapter discusses the 1997–1998 Asian Financial Crisis, a monumental event in post-war East Asian international relations triggered by a currency crisis. The chapter ends with a discussion of the 2008 Great Recession.