Is Greater China a currency union? A tale of the Chinese trio

Document Type

Journal Article

Publisher

Elsevier

Faculty

Faculty of Business and Law

School

School of Accounting, Finance and Economics

RAS ID

5676

Comments

Zhang, Z., Sato, K., & McAleer, M. (2008). Is Greater China a currency union?: A tale of the Chinese trio. Mathematics and Computers in Simulation, 78(2), 319-327. Available here

Abstract

With the rapid flow of knowledge and capital from Hong Kong and Taiwan to Mainland China, a dynamic economy of “Greater China” has emerged, making the Chinese trio increasingly interdependent on trade and investment. In this paper we develop a three-variable VAR model to assess empirically the feasibility of forming a currency union in the Greater China area. The empirical results suggest that, from an economic perspective, it is feasible for the Chinese trio to move toward a currency union because of the increasing symmetry of shocks, the dynamic economic integration among the Greater China economies, and the speed of adjustment to shocks.

DOI

10.1016/j.matcom.2008.01.008

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Link to publisher version (DOI)

10.1016/j.matcom.2008.01.008