Bilateral Trade and Intra-Regional Business Cycles: Is East Asia Feasible for a Currency Area?

Lee Yu-Feng L ()
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Lee Yu-Feng L: New Mexico State University

Global Economy Journal, 2007, vol. 7, issue 3, 12

Abstract: This paper investigates the synchronization of the intra-East Asian business cycles based on regional bilateral trade statistics. By evaluating three macroeconomic fundamentals: real GDP, industrial production, and unemployment, it is found that tighter intra-East Asian trade may most likely lead to more idiosyncratic business cycles and hence lower correlations of economic activity. When using regional trade as an international openness criterion in the theory of Optimum Currency Area, the finding suggests that for the immediate future, the creation of an East Asian monetary/currency union may not be feasible.

Keywords: intra-East Asia; business cycles; bilateral trade; optimum currency area (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (7)

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DOI: 10.2202/1524-5861.1264

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