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Can South Asia Adopt a Common Currency?

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  • Sweta C. Saxena

    (University of Pittsburgh)

Abstract

The paper examines if the seven South Asian countries satisfy the criteria to form an optimal currency area. The empirical part of the paper reveals some positive attributes (such as the existence of positive shocks for major economies like India, Pakistan and Sri Lanka). The paper provides geo-political reasoning for more economic cooperation among the countries, suggesting areas where cooperation could be mutually beneficial to the economies. This paper argues that the benefits of a common currency would accrue from the peace that economic integration would bring between India and Pakistan. The paper also compares this region with Western Europe and Southeast Asia.

Suggested Citation

  • Sweta C. Saxena, 2005. "Can South Asia Adopt a Common Currency?," International Finance 0508001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpif:0508001
    Note: Type of Document - pdf; pages: 44
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    References listed on IDEAS

    as
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    Cited by:

    1. Agénor, Pierre-Richard & Aizenman, Joshua, 2011. "Capital market imperfections and the theory of optimum currency areas," Journal of International Money and Finance, Elsevier, vol. 30(8), pages 1659-1675.
    2. Sweta C. Saxena, 2005. "Are Optimal Currency Areas Optimal for All? A Reassessment of the Case for Asian Monetary Union," International Finance 0508003, University Library of Munich, Germany.
    3. Tomoya Suzuki, 2019. "Counterfactual Inflation Targeting in Nepal," South Asian Journal of Macroeconomics and Public Finance, , vol. 8(2), pages 97-117, December.
    4. Regmi, Krishna & Nikolsko-Rzhevskyy, Alex & Thornton, Robert, 2015. "To be or not to be: An optimum currency area for South Asia?," Journal of Policy Modeling, Elsevier, vol. 37(6), pages 930-944.
    5. Badri Narayan Rath & Purna Chandra Parida, 2014. "Did Openness and Human Capital Affect Total Factor Productivity? Evidence from the South Asian Region," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 6(2), pages 103-118, May.
    6. Md. Abdur Rahman Forhad, 2014. "How many currencies in Saarc countries? a multivariate structural var approach," Journal of Developing Areas, Tennessee State University, College of Business, vol. 48(4), pages 265-286, October-D.
    7. Chuku, Chuku, 2012. "The proposed eco: should West Africa proceed with a common currency?," MPRA Paper 43739, University Library of Munich, Germany.
    8. Feghehmajidi , Ali & Ahmad Zade , Khaled & Najafi , Fatemeh, 2019. "An Investigation of the Effect of a Common Currency on Bilateral Trade," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 14(1), pages 63-84, January.
    9. Zahid Shahab Ahmed & Munir Hussain, 2019. "Lessons from the European Union’s Economic Integration for South Asian Regionalism," Journal of Developing Societies, , vol. 35(3), pages 325-345, September.
    10. Anjan Panday, 2014. "Monetary Integration between India and Nepal," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 15(2), pages 199-224, September.
    11. Devanthran, Haritharan, 2009. "Interdependence of SAARC-7 countries: an empirical study of business cycles," MPRA Paper 32798, University Library of Munich, Germany.

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    More about this item

    Keywords

    South Asia; SAARC; Monetary union; economic integration; optimal currency areas;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Unión monetaria in Wikipedia Galician
    2. Валютный союз in Wikipedia Russian
    3. Unión monetaria in Wikipedia Spanish

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