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South Asian Monetary Integration in Light of the Optimum Currency Area Criteria Patterns of Shocks: A Comment

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  • Sweta Chaman Saxena

    (Department of Economics University of Pittsburgh, 3E15 Posvar Hall, Pittsburgh, PA 15260 Email: ssaxena@pitt.edu.)

Abstract

The objective of this note is to bring out the inconsistency in empirical estimation and conclusions that are derived in Maskay (2001). The estimation of the structural VAR model doesn't reject the over-identifying restrictions for all countries, as emphasized by Maskay (2001). The correlation coefficients of the supply shocks do show subsets of countries that can possibly form an OCA. The size and the speed of adjustment point out that any loss in policy independence may be negligible.

Suggested Citation

  • Sweta Chaman Saxena, 2002. "South Asian Monetary Integration in Light of the Optimum Currency Area Criteria Patterns of Shocks: A Comment," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 3(2), pages 265-280, September.
    • Handle: RePEc:sae:soueco:v:3:y:2002:i:2:p:265-280
    DOI: 10.1177/139156140200300210
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    References listed on IDEAS

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    1. Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-673, September.
    2. Nephil Matangi Maskay, 2002. "South Asian Monetary Integration in Light of the Optimum Currency Area Criteria Patterns of Shocks: A Reply," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 3(2), pages 281-284, September.
    3. Bayoumi, T. & Eichengreen, B., 1994. "One Money or Many? Analysing the Prospects for Monetary Unification in Various Parts of the World," Princeton Studies in International Economics 76, International Economics Section, Departement of Economics Princeton University,.
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    1. Nephil Matangi Maskay, 2002. "South Asian Monetary Integration in Light of the Optimum Currency Area Criteria Patterns of Shocks: A Reply," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 3(2), pages 281-284, September.
    2. Genberg, Hans & Siklos, Pierre L., 2010. "Revisiting the shocking aspects of Asian monetary unification," Journal of Asian Economics, Elsevier, vol. 21(5), pages 445-455, October.

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