Is a monetary union feasible for East Asia?
Document Type
Journal Article
Publisher
Taylor and Francis
Faculty
Faculty of Business and Law
School
School of Accounting, Finance and Business Economics
RAS ID
8160
Abstract
The empirical suitability of the East Asian economies for potential monetary integration is assessed. The structural vector autoregression (VAR) method is employed to identify the underlying shocks using a three-variable VAR model across the East Asian economies. The estimates of the EEC are used as a benchmark to compare the size of the underlying shocks and the speed of adjustment to shocks in both regions to determine the feasibility of forming an optimum currency area (OCA) in East Asia. The empirical results do not display strong support for forming an OCA in the East Asian region. The results do imply, however, that some small subregions are potential candidates for OCAs, since their disturbances are correlated and small and these economies adjust rapidly to shocks.
DOI
10.1080/0003684042000246740
Comments
Zhang, Z., Sato, K., & McAleer, M. (2004). Is a monetary union feasible for East Asia?. Applied Economics, 36(10), 1031-1043.