Is China an Optimum Currency Area?

Hans Byström, Karin Olofsdotter () and Lars Söderström ()

No 2005:6, Working Papers from Lund University, Department of Economics

Abstract: This paper analyzes regional differences across Chinese regions, employing an optimum currency area framework. Empirically, we consider the cross-sectional correlation measure of Solnik & Roulet (2000) when examining data on GDP, trade, inflation and regional budget between 1991 and 2001. Our preliminary results suggest that China probably is more of an optimum currency area than first expected. It is debatable, though, whether Hong Kong and Macao are appropriate as candidates. The results also indicate that there might be other constellations of regions that could be closer to an optimum currency area than the current Yuan area.

Keywords: China; optimum currency area; regional developments; cross-sectional correlation (search for similar items in EconPapers)
JEL-codes: C32 F33 O53 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2005-01-25
New Economics Papers: this item is included in nep-mon, nep-sea and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Journal of Asian Economics, 2005, pages 612-634.

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