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Asian Monetary Cooperation: Perspectives From The Optimum Currency Area Analysis

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  • THOMAS D. WILLETT

    (Claremont Graduate University and Claremont McKenna College, Harper East 206, School of Politics and Economics, 160 E. 10 street, Claremont, 91711, USA;
    Economic Policy Studies, Harper East 206, School of Politics and Economics, 160 E. 10 street, Claremont, 91711, USA)

  • ORAWAN PERMPOON

    (Politics and Economics at Claremont, Graduate University, USA)

  • LALANA SRISORN

    (Politics and Economics at Claremont, Graduate University, USA)

Abstract

We argue that a number of recent studies have overstated the economic case for the creation of a common Asian currency by focusing on only a few of the relevant criteria. We also conclude that endogenous forces are unlikely to be sufficiently strong that adopting a common currency would quickly turn Asia into an optimum currency area (OCA) as some have suggested. We argue that more attention needs to be devoted to issues of monetary, fiscal, and exchange rate coordination under a fairly flexible exchange rate system and that OCA analysis is a valuable framework for analyzing such issues.

Suggested Citation

  • Thomas D. Willett & Orawan Permpoon & Lalana Srisorn, 2010. "Asian Monetary Cooperation: Perspectives From The Optimum Currency Area Analysis," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 55(01), pages 103-124.
    • Handle: RePEc:wsi:serxxx:v:55:y:2010:i:01:n:s0217590810003638
    DOI: 10.1142/S0217590810003638
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    References listed on IDEAS

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    1. Huh, Hyeon-seung & Kim, David & Kim, Won Joong & Park, Cyn-Young, 2015. "A factor-augmented VAR analysis of business cycle synchronization in east Asia and implications for a regional currency union," International Review of Economics & Finance, Elsevier, vol. 39(C), pages 449-468.
    2. Ming-Jen Chang, 2016. "Half-Life Deviations From Purchasing Power Parity: Evidence From Pacific Rim Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(04), pages 1-20, September.
    3. Willett, Thomas D. & Srisorn, Nancy, 2014. "The political economy of the Euro crisis: Cognitive biases, faulty mental models, and time inconsistency," Journal of Economics and Business, Elsevier, vol. 76(C), pages 39-54.
    4. Hyeon-seung Huh & David Kim & Won Joong Kim & Cyn-Young Park, 2013. "A Factor-Augmented Vector Autoregression Analysis of Business Cycle Synchronization in East Asia and Implications for a Regional Currency Union," ADB Economics Working Paper Series 385, Asian Development Bank.

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