Feasibility of Currency Unions in Asia - An Assessment Using Generalized Purchasing Power Parity -
This paper examined the economic feasibility of forming a regional currency block in Asia, by adopting a generalized purchasing power parity (G-PPP) approach to identify the existence of common trends in real exchange rates among a group of countries. To be specific, we conducted both bilateral and multilateral co-integration estimation on real exchange rates with the samples of 17 Asian countries covering south Asia during the post- 1997-98 crisis period. Our findings are as follows; First, Japan, China and Korea are shown to be little candidate for any optimum currency areas. Second, ASEAN and south Asia, as a group, passed the G-PPP condition. Third, some co-integrating interactions were interestingly found between ASEAN and south Asian members. Our strategic implication emphasizes on the significance of a smaller local subgroup multi-speed strategy toward a long-run goal of currency union in Asia.
Volume (Year): 6 (2010)
Issue (Month): 5 (June)
|Contact details of provider:|| Web page: http://www.mof.go.jp/pri/Email: |
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Enders, Walter & Hurn, Stan, 1994. "Theory and Tests of Generalized Purchasing-Power Parity: Common Trends and Real Exchange Rates in the Pacific Rim," Review of International Economics, Wiley Blackwell, vol. 2(2), pages 179-90, June.
- Changmo AHN & Hong-Bum KIM & Dongkoo CHANG, 2006. "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," The Developing Economies, Institute of Developing Economies, vol. 44(3), pages 288-305.
When requesting a correction, please mention this item's handle: RePEc:mof:journl:ppr011e. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Policy Research Institute)
If references are entirely missing, you can add them using this form.