Can South Asia Adopt a Common Currency?

Sweta C. Saxena

International Finance from EconWPA

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.

Keywords: South Asia; SAARC; Monetary union; economic integration; optimal currency areas (search for similar items in EconPapers)
JEL-codes: F33 F36 F42 E32 (search for similar items in EconPapers)
Date: 2005-08-07
Note: Type of Document - pdf; pages: 44
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Journal Article: Can South Asia adopt a common currency? (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpif:0508001

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