Is East Asia fit for an optimum currency area? An assessment of the economic feasibility of a higher degree of monetary cooperation in East Asia

Developing Economies

Volumn 44, Issue 3, 2006, Pages 288-305

  Ahn, Changmo ^a   Kim, Hong Bum ^a   Chang, Dongkoo ^b  

^a Gyeongsang National University   (South Korea)

^b Export Import Bank of Korea   (South Korea)

Author keywords

East Asia; Generalized PPP; Monetary coordination; Optimum currency area; Structural VAR

Indexed keywords

ASEAN; CURRENCY MARKET; DEVELOPMENT ECONOMICS; MACROECONOMICS; MONETARY UNION; PURCHASING POWER PARITY; VECTOR AUTOREGRESSION;

ASIA; EURASIA; FAR EAST; NORTHEAST ASIA;

EID: 33746492695     PISSN: 00121533     EISSN: 17461049     Source Type: Journal    
DOI: 10.1111/j.1746-1049.2006.00018.x     Document Type: Article

References (21)

1. Bayoumi, Tamim, and Barry Eichengreen. 1994. One Money or Many? Analyzing the Prospects for Monetary Unification in Various Parts of the World. Princeton, N.J.: International Finance Section, Department of Economics, Princeton University.
2. Bayoumi, Tamim, and Paolo Mauro. 2001. "The Suitability of ASEAN for a Regional Currency Arrangement." World Economy 24, no. 7: 933-54.
3. Calvo, Guillermo A., and Carmen M. Reinhart. 2002. "Fear of Floating." Quarterly Journal of Economics 117, no. 2: 379-408.
4. Chaipravat, Olarn; Bhasu B. Supapol; and Kanit Sangsubhan. 2003. "Regional Self Help and Support Mechanisms: Beyond the Chiang Mai Initiative."Paper submitted to the ASEAN Secretariat.
5. Chang, Dongkoo, and Young J. Choi. 2002. "Oehwan wigi ihu jeokjeong hwanyul jedo seontaek noneui wa urinara eui byeondong hwanyul jedo unyong pyeongga" [Discussion on the selection of appropriate exchange rate regime after the currency crisis in Korea and the evaluation of its performance of floating exchange regime]. Seoul: Institute of Monetary and Economic Research, Bank of Korea.
6. Dewatripont, Mathias; Francesco Giovazzi; Jurgen von Hagen; Ian Harden; Torsten Persson; Gerard Roland; Howard Rosenthal; Andre Sapir; and Guido Tabellini. 1995. Flexible Integration: Towards a More Effective and Democratic Europe. London: Center for Economic Policy Research.
7. Eichengreen, Barry. 1994. International Monetary Arrangements for the 21st Century. Washington, D.C.: Brookings Institution Press.
8. Eichengreen, Barry. 1999. Toward a New International Financial Architecture: A Practical Post-Asia Agenda. Washington, D.C.: Institute for International Economics.
9. Eichengreen, Barry, and Tamim Bayoumi. 1999. "Is Asia an Optimum Currency Area? Can It Become One? Regional, Global and Historical Perspectives on Asian Monetary Relations." In Exchange Rate Policies in Emerging Asian Countries, ed. Stefan Collignon; Jean Pisani-Ferry; and Yung Chul Park. London: Routledge.
10. Enders, Walter, and Stan Hurn. 1994. "Theory and Tests of Generalized Purchasing-Power Parity: Common Trends and Real Exchange Rates in the Pacific Rim." Review of International Economics 2, no. 2: 179-90.
11. Enders, Walter. 1997. "Common Trends and Generalized Purchasing Power Parity." Mathematics and Computers in Simulation 43, no. 3-6: 437-43.
12. Horvath, Julius, and Richard Grabowski. 1997. "Prospects of African Integration in Light of the Theory of Optimum Currency Areas." Journal of Economic Integration 12, no. 1: 1-25.
13. Kwack, Sung Yeung. 2004. "An Optimum Currency Area in East Asia: Feasibility, Coordination, and Leadership Role." Journal of Asian Economics 15, no. 1: 153-69.
14. Kwack, Sung Yeung; Choong Yong Ahn; and Young-Sun Lee. 2003. Monetary Cooperation in East Asia: Exchange Rate, Monetary Policy, and Financial Market Issues. Policy Analyses 03-01. Seoul: Korea Institute for International Economic Policy.
15. Liang, Hong. 1999. "Do Hong Kong SAR and China Constitute an Optimal Currency Area? An Empirical Test of the Generalized Purchasing Power Parity Hypothesis." IMF Working Paper no. WP/99/79. Washington, D.C.: International Monetary Fund.
16. Ling, Phui, and Hazel Yuen. 2001. "Optimum Currency Areas in East Asia: A Structural VAR Approach." ASEAN Economic Bulletin 18, no. 2: 206-17.
17. Ogawa, Eiji, and Kentaro Kawasaki. 2003. "What Should Be Weights on the Three Major Currencies for a Common Currency Basket in East Asia?" Photocopy, Hitotsubashi University, Tokyo.
18. Romano, Albert. 1970. Applied Statistics for Science and Industry. Boston: Allyn and Bacon.
19. Stock, James H., and Mark W. Watson. 1988. "Testing for Common Trends." Journal of the American Statistical Association 83, no. 404: 1097-107.
20. Wyplosz, Charles. 2001. "A Monetary Union in Asia? Some European Lessons." In Future Directions for Monetary Policies in East Asia, ed. David Gruen and John Simon. Sydney: Reserve Bank of Australia.
21. Xu, Mingqi. 2004. "East Asian Monetary Integration: Possibility and Feasibility." Paper presented at the International Forum on Monetary and Financial Cooperation for Asia, Seoul, Korea Money and Finance Association.