Testing for the possibility of a monetary union in the ASEAN+3 countries: rationality and asymmetric loss functions

Hyun-Jae Rhee

Applied Economics Letters, 2012, vol. 19, issue 3, 261-268

Abstract: This study uses market variables, such as the rates of foreign exchange, interest and inflation, to determine if a market-led monetary integration in the ASEAN+3 countries is possible. Following Batchelor and Peel (1998), rationality is revealed in the presence of an asymmetric Linex loss function. In order to generate an expected value for a target variable, arithmetically weighted, pseudo-numeraire and Auto-Regressive Integrated Moving Average (ARIMA(1,1,1)) process information matrices are generated. It is found that certain preconditions have to be fulfilled in the ASEAN+3 countries for monetary unification to take place and that this process must be gradual. In particular, an economic infrastructure has to be built to strengthen foreign exchange markets in this region.

Date: 2012
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13504851.2011.572840 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:19:y:2012:i:3:p:261-268

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504851.2011.572840

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().