The suitability of a monetary union in East Asia: What does the cointegration approach tell?

Sato, Kiyotaka; Zhang, Zhaoyong; Allen, David E.

doi:10.1016/j.matcom.2008.10.004

Cited by 12 publications

(5 citation statements)

References 24 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In response to the contradiction in earlier literature, some recent literature applies alternative approaches to evaluate feasibility of OCA theory in Asia. Sato, Zhang and Allen (2009) applied the multivariate co-integration technique and identified two feasible monetary groups; one is the Asian NIEs plus the United States and the other is ASEAN5 plus Japan. China was not found feasible for joining either group.…”

Section: Controversy Over Potential Size Of Currency Area In East Asiamentioning

confidence: 99%

Regional Currency or Regional Trade Policy? An East Asian Perspective of 21st Century Growth

Kabir

Salim²

2019

Book of Abstracts International Conference on Economics and Development

View full text Add to dashboard Cite

Being inspired by initial Euro-success, renowned economist Robert Mundell was overoptimistic about adoption of a large currency area in Asia; however, empirical literature on East Asian regional currency is yet inconclusive. Advocates of the optimum currency area (OCA) theory identifies trade enhancement as a major benefit of regional currency adoption. East Asia, however, enjoys high trade enhancement for decades through their ongoing regional integration process in spite of long-practiced controversial individual currency arrangements. As such, a well-managed regional trade policy seems more appropriate for East Asian trade and economic growth. Existing literature consistently ignores the importance of East Asian regional 'trade policy' integration and limit the focus to regional 'trade' integration motivated by the OCA literature.

show abstract

Section: Controversy Over Potential Size Of Currency Area In East Asiamentioning

confidence: 99%

Regional Currency or Regional Trade Policy? An East Asian Perspective of 21st Century Growth

Kabir

Salim²

2019

Book of Abstracts International Conference on Economics and Development

View full text Add to dashboard Cite

show abstract

“…Sato, Zhang and Allen [3] employed the Johansen cointegration approach to investigate the long-run co-movement of real outputs in East Asia, USA and Japan to find some implications for forming a monetary union. Their results suggest that some NIEs of Asian countries plus the USA is a potential for monetary union.…”

Section: Previous Studiesmentioning

confidence: 99%

Financial Integration and Common Currency Area in ASEAN

Gharleghi¹,

Shafighi²,

Benjamin³

2015

JOEBM

View full text Add to dashboard Cite

show abstract

“…6 a significant common growth dynamic inside the region by using a state-space framework where common movement is captured by unobservable variables influencing the evolution of the GDP growths. Using cointegration techniques, Sato and Zhang (2006) find that some pair-countries in the region share both the long-run and the short-run synchronous movements of the real outputs, particularly among the ASEAN economies consisting of Singapore, Thailand and Indonesia, and among the Northeast Asian region, which consists of Hong Kong, Korea, Mainland China,Japan and Taiwan while Sato et al (2009) find that ASEAN countries alone are not a feasible group among which to form a monetary union unless Japan is included.…”

Section: Are the Shocks Facing The Countries Correlated?mentioning

confidence: 99%

“…This can pose a greater obstacle for monetary integration if macroeconomic fundamentals among the economies, such as real output variables, are not cointegrated. Accordingly, this can lead to a different growth path for each country in the long-run (Sato et al (2009)).…”

Section: Cointegration Analysesmentioning

confidence: 99%

Southeast Asian monetary integration: New evidences from fractional cointegration of real exchange rates

Truchis¹,

Keddad²

2013

Journal of International Financial Markets, Institutions and Mo

View full text Add to dashboard Cite

We study the long-run relationship of real exchanges rates (RERs) among the ASEAN-5 countries by testing the theory of Generalized Purchasing Power Parity (G-PPP) from the new perspective of fractional cointegration. The long-run co-movements of the RERs are examined by applying a recent estimator of fractional cointegration that consists of a frequency Whittle approximation of the cointegrating system's likelihood function. The contribution of the fractional cointegration study is justified by identifying several weak fractional cointegration relationships that signal that deviations of RERs from their long-run equilibrium are highly persistent. These findings contrast with all previous studies that restrict their investigation to the traditional I(1)/I(0) cointegration. Our results support further monetary integration among different sub-groups of the ASEAN-5 countries as they share long-run comovements with each others. However, a full-fledged monetary union embracing all ASEAN-5 members is still limited from the perspective of the G-PPP theory.

show abstract

The suitability of a monetary union in East Asia: What does the cointegration approach tell?

Cited by 12 publications

References 24 publications

Regional Currency or Regional Trade Policy? An East Asian Perspective of 21st Century Growth

Regional Currency or Regional Trade Policy? An East Asian Perspective of 21st Century Growth

Financial Integration and Common Currency Area in ASEAN

Southeast Asian monetary integration: New evidences from fractional cointegration of real exchange rates

Contact Info

Product

Resources

About