Does currency matter for regional trade integration?

He, Qing; Zhang, Ce; Zhu, Wanling

doi:10.1016/j.iref.2019.11.010

Cited by 3 publications

(1 citation statement)

References 13 publications

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“…When viewed from the bilateral cooperation agreement between Indonesia and Pakistan signed in 2005 until now, for the Pakistan-Indonesia rice trade, the cooperation agreement does not affect market integration between the two countries. This study differs from He (2019) which also shows trade openness affects trade integration.…”

Section: Integration Of the Indonesian Rice Market With Pakistani Ric...contrasting

confidence: 70%

The Dynamics of Rice Price in Cipinang Market Due to Shock of Pakistani Export Prices

Muhlis,

Harianto,

Nurmalina

et al. 2023

IJPSAT

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One form of bilateral cooperation between Indonesia and Pakistan is the entry of Pakistan as a general category of rice exporter to Indonesia in 2018. This condition will affect the price of rice traded in a traditional market in this case the Cipinang wholesale market. This study aims to examine changes in rice price in the wholesale market due to price shock in the Pakistani market. The data used were monthly data from January 2001-May 2018. Data were analyzed using VAR and VECM. The analysis results show that between the Indonesian and Pakistani rice markets, there is no integration. However, if they are integrated with rice in the Cipinang wholesale market, rice in the Pakistani market occurs integration with Cianjur kepala, Cianjur slyp, Muncul I, Muncul II, Muncul III and IR 42. The IR 42 rice price changes due to the changes on Pakistani rice price which does not cause any changes on other rice prices in the Cipinang Market. Based on this research, Indonesia could import rice from Pakistan by paying attention to farmers who grow varieties of rice that are integrated with Pakistani rice.

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Section: Integration Of the Indonesian Rice Market With Pakistani Ric...contrasting

confidence: 70%

The Dynamics of Rice Price in Cipinang Market Due to Shock of Pakistani Export Prices

Muhlis,

Harianto,

Nurmalina

et al. 2023

IJPSAT

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Breaking badly: The currency union effect on trade

Campbell

Chentsov

2023

Journal of International Money and Finance

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Criteria of the optimal currency area: an empirical analysis

Cокуренко

2021

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Using annual data of 37 countries for 2010-2018, the paper studies the relationship between the average GDP growth rate and several exogenous variables analyzed in the context of the Optimal Currency Area (OCA), such as openness for trade and capital flows, inflation and synchronization of the business cycles, based on the cross-section regression model. Similar relationships are estimated for the quarterly time series of Ukraine’s economy for 2010-2020. The paper argues that the GDP rate is positively related to both the openness to foreign trade and lower inflation, a result in line with the implications of the OCA theory. However, a similar stimulating effect of the capital inflows for Ukraine significantly differs from the opposite outcome obtained in the estimates of the cross-section regression for 37 countries. Our results mean that openness for trade is not excessive in Ukraine. While most countries have experienced a decline in the share of exports and imports in GDP since 2010, an upward trend in Ukraine, similar to the Central and Eastern European (CEE) countries, can be viewed in a favourable way. As there is an inverse relationship between the average GDP growth rate and initial GDP per capita, it is an argument in support of the neoclassical long-term growth models. It is clear that middle-income countries experience the convergence of income in line with the provisions of the neoclassical theory. However, net capital inflows do not play any role in the convergence process, thus rejecting one of the pillars of the neoclassical theory. For the cross-section estimates, no link between economic growth and business cycle synchronization with the main trade partner is detected. On the other hand, economic growth in Ukraine is closely related to the GDP dynamics in the Eurozone, being an extra argument in favour of the European integration process in general and the OCA theory in particular. It is worth noting that the exchange rate depreciation brings about a GDP slowdown in Ukraine. Such an outcome implies that any efforts to compensate for the worsening of the external conditions with an accommodating exchange rate policy seem to be counterproductive. Also, it argues in favour of stable exchange rate arrangements. In a conventional way, an increase in Ukraine’s lending rate is associated with a decrease in the GDP growth rate.

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Does currency matter for regional trade integration?

Cited by 3 publications

References 13 publications

The Dynamics of Rice Price in Cipinang Market Due to Shock of Pakistani Export Prices

The Dynamics of Rice Price in Cipinang Market Due to Shock of Pakistani Export Prices

Breaking badly: The currency union effect on trade

Criteria of the optimal currency area: an empirical analysis

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