Is Optimum Currency Area Theory Irrelevant for Economies in Transition?

2019 ◽  
pp. 45-60 ◽  
Author(s):  
Linda S. Goldberg
Keyword(s):  
Optimum Currency Area ◽  
Economies In Transition ◽  
Currency Area ◽  
Optimum Currency

Bilateral Trade and Intra-Regional Business Cycles: Is East Asia Feasible for a Currency Area?

2007 ◽  
Vol 7 (3) ◽  
pp. 1850113 ◽  
Author(s):  
Yu-Feng L. Lee
Keyword(s):  
Business Cycles ◽  
Bilateral Trade ◽  
East Asian ◽  
Currency Union ◽  
Optimum Currency Area ◽  
Regional Trade ◽  
Currency Area ◽  
Real Gdp ◽  
Optimum Currency ◽  
International Openness

This paper investigates the synchronization of the intra-East Asian business cycles based on regional bilateral trade statistics. By evaluating three macroeconomic fundamentals: real GDP, industrial production, and unemployment, it is found that tighter intra-East Asian trade may most likely lead to more idiosyncratic business cycles and hence lower correlations of economic activity. When using regional trade as an international openness criterion in the theory of Optimum Currency Area, the finding suggests that for the immediate future, the creation of an East Asian monetary/currency union may not be feasible.

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