Suggestions for an East Asian Monetary Union: Focusing on the Effects of Monetary Integration on Bilateral Trade

Min-Chang Ko () and Byung-Taik Cho ()
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Min-Chang Ko: National Health Insurance Service
Byung-Taik Cho: Hanyang University

East Asian Economic Review, 2006, vol. 10, issue 1, 131-157

Abstract: This study explores alternative ways toward the East Asian monetary union, focusing on the effect of monetary integration on bilateral trade. For this purpose, we analyze with gravity model changes of the bilateral trade among countries of EU, NAFTA, and East Asia. A distinctive feature of this model is that it includes the dummy variables that show the cultural intimacy among North-East Asian countries, Asian NIEs countries, and East Asian countries (North-East Asian and ASEAN countries). We discovered that bilateral trade increased at a highest level among East Asian countries than the other two cases. This result suggests that the once-and-for-all strategy to develop an East Asian monetary union including North-East Asian and ASEAN countries would be more efficient than the multitrack strategy that forms the monetary union of North-East Asian countries in the first place and then tries to extend it to ASEAN countries.

Keywords: Monetary Integration; East Asian Monetary Union; Gravity Model; Trade Dependence Index; Trade Intensity Index (search for similar items in EconPapers)
JEL-codes: C22 E63 F42 O47 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ris:eaerev:0170

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