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An Asian Monetary Union?

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  • Hsiao Chink Tang

Abstract

This study empirically examines whether a group of 12 Asian countries is suitable to form an Asian Monetary Union (AMU). The criteria of suitability are based on the Optimum Currency Area (OCA) literature whereby countries experiencing symmetrical shocks, have smaller size of shock and faster speed of adjustment are considered as potentially good partners in a monetary union. The Blanchard and Quah (BQ) structural vector autoregression (SVAR) methodology is used to identify the demand and supply shocks. The overall finding provides no support for the formation of a full-fledged AMU. Instead, what appears more feasible initially is the formation of smaller sub-groupings within the region.

Suggested Citation

  • Hsiao Chink Tang, 2006. "An Asian Monetary Union?," CAMA Working Papers 2006-13, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2006-13
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2021-06/13_tang_2006.pdf
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    References listed on IDEAS

    as
    1. Wilson, Peter, 2002. "Prospects for Asian Monetary Cooperation After the Asian Financial Crisis. Pipedream or Possible Reality?," EIJS Working Paper Series 151, Stockholm School of Economics, The European Institute of Japanese Studies.
    2. van Zandweghe, Willem & Gottschalk, Jan, 2001. "Do Bivariate SVAR Models with Long-Run Identifying Restrictions Yield Reliable Results? The Case of Germany," Kiel Working Papers 1068, Kiel Institute for the World Economy (IfW Kiel).
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    Cited by:

    1. Shingo Watanabe & Masanobu Ogura, 2006. "How Far Apart Are Two ACUs from Each Other? : Asian Currency Unit and Asian Currency Union," Bank of Japan Working Paper Series 06-E-20, Bank of Japan.
    2. Michael G. Plummer & Ganeshan Wignaraja, 2006. "The Post-Crisis Sequencing of Economic Integration in Asia: Trade as a Complement to a Monetary Future," Economie Internationale, CEPII research center, issue 107, pages 59-85.
    3. Jarko Fidrmuc & Iikka Korhonen, 2018. "Meta‐Analysis of Chinese Business Cycle Correlation," Pacific Economic Review, Wiley Blackwell, vol. 23(3), pages 385-410, August.
    4. repec:rim:rimwps:12-07 is not listed on IDEAS
    5. Woosik Moon & Yeongseop Rhee, 2012. "Asian Monetary Integration," Books, Edward Elgar Publishing, number 14191.
    6. Genberg, Hans & Siklos, Pierre L., 2010. "Revisiting the shocking aspects of Asian monetary unification," Journal of Asian Economics, Elsevier, vol. 21(5), pages 445-455, October.
    7. Watanabe, Shingo & Ogura, Masanobu, 2010. "How far apart are the two ACUs from each other? Asian currency unit and Asian currency union," Emerging Markets Review, Elsevier, vol. 11(2), pages 152-172, June.

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