Optimum Currency Areas in East Asia: A Structural VAR Approach

Grace Lee and M Azali
Authors registered in the RePEc Author Service: M. Azali

No 19-09, Monash Economics Working Papers from Monash University, Department of Economics

Keywords: Optimum Currency Area; Monetary Union; Vector autoregression; Exchange rate; East Asia Abstract: This paper assesses the empirical desirability of the East Asian economies to an alternative exchange rate arrangement (a monetary union) that can potentially enhance the exchange rate stability and credibility in the region. Specifically, the symmetry in macroeconomic disturbances of the East Asian economies is examined as satisfying one of the preconditions for forming an Optimum Currency Area (OCA). The Structural Vector Autoregression (VAR) method is employed to assess the nature of macroeconomic disturbances among the East Asian countries, as a preliminary guide in identifying potential candidates for forming an OCA. The preliminary findings of this study suggest that there exists scope among some small sub-regions for potential monetary integration. (search for similar items in EconPapers)
Pages: 24pages
Date: 2009-08
New Economics Papers: this item is included in nep-ifn, nep-mon and nep-sea
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Citations: View citations in EconPapers (1)

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