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The Suitability Of A Greater China Currency Union

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  • Yin-Wong Cheung
  • Jude Yuen

Abstract

The study assesses the level of integration among the three Greater China economies (China, Hong Kong and Taiwan) and examines the suitability of a Greater China currency union. The three economies already have extensive trade and investment linkages. Our analyses show that they share common long-run and short-run cyclical variations. We also estimate the output costs of relinquishing policy autonomy to form a currency union. The estimated output losses, which depend on, e.g., the method used to generate shock estimates, seem to be moderate and are likely to be less than the efficient gains derived from a currency union. Copyright 2005 Blackwell Publishing Ltd

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Pacific Economic Review.

Volume (Year): 10 (2005)
Issue (Month): 1 (02)
Pages: 83-103

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Handle: RePEc:bla:pacecr:v:10:y:2005:i:1:p:83-103

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Citations

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Cited by:
  1. Zhang, Zhaoyong & Sato, Kiyotaka & McAleer, Michael, 2008. "Is Greater China a currency union?," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 78(2), pages 319-327.
  2. Kiyotaka Sato & Zhaoyong Zhang & Michael McAleer, 2010. "Identifying Shocks in Regionally Integrated East Asian Economies with Structural VAR and Block Exogeneity," Working Papers in Economics 10/23, University of Canterbury, Department of Economics and Finance.
  3. Sato, Kiyotaka & Zhang, Zhaoyong & Allen, David, 2009. "The suitability of a monetary union in East Asia: What does the cointegration approach tell?," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 79(9), pages 2927-2937.
  4. Yin-Wong Cheung & Matthew S. Yiu & Kenneth K. Chow, 2009. "A Factor Analysis of Trade Integration: the Case of Asian and Oceanic Economies," Economie Internationale, CEPII research center, issue 119, pages 5-23.
  5. Viv B. Hall, 2005. "An Australasian Currency, New Zealand Adopting The Us Dollar, Or An Independent Monetary Policy?," CAMA Working Papers 2005-22, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  6. Zhaoyong Zhang & Kiyotaka Sato, 2008. "Whither A Currency Union in Greater China?," Open Economies Review, Springer, vol. 19(3), pages 355-370, July.

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