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Are The "Asean Plus Three" Countries Coming Closer To An Optimum Currency Area?

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  • KENTARO KAWASAKI

    (Faculty of Business Administration, Toyo University, 5-28-20 Hakusan, Bunkyo-ku, Tokyo 112-8606, Japan)

Abstract

This paper aims to investigate whether the East Asian countries — ASEAN5, China, Korea, and Japan — have developed a matching "Optimum Currency Area (OCA) theory" in recent years because the establishment of stable exchange rate linkages and the enhancement of monetary policy credibility are needed for further economic developments in East Asia. In developing the earlier generalized purchasing power parity (G-PPP) model into an up-to-date nonlinear econometric model and considering the adoption of the Asian Monetary Unit (AMU) into this area, this paper could have positive empirical results, which suggest for forming a common currency area in East Asia.

Suggested Citation

  • Kentaro Kawasaki, 2012. "Are The "Asean Plus Three" Countries Coming Closer To An Optimum Currency Area?," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 1-31.
    • Handle: RePEc:wsi:ceprxx:v:01:y:2012:i:02:n:s1793969012500112
    DOI: 10.1142/S1793969012500112
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    References listed on IDEAS

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    5. Bayoumi, Tamim & Eichengreen, Barry & Mauro, Paolo, 2000. "On Regional Monetary Arrangements for ASEAN," Journal of the Japanese and International Economies, Elsevier, vol. 14(2), pages 121-148, June.
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    Cited by:

    1. Kentaro Kawasaki & Zhi-Qian Wang, 2015. "Is Economic Development Promoting Monetary Integration in East Asia?," IJFS, MDPI, vol. 3(4), pages 1-31, October.
    2. Kawasaki, Kentaro & Sato, Kiyotaka, 2021. "A new assessment of economic integration in East Asia: Application of an industry-specific G-PPP model," Japan and the World Economy, Elsevier, vol. 60(C).

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    More about this item

    Keywords

    OCA; exchange rate; M-TAR; co-integration with thresholds adjustment; F31; F33; F36;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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