: (Suggestion for an East Asian Monetary Union: Focusing on the Effect of Monetary Integration on Bilateral Trade)

2006 ◽  
Author(s):  
Min-Chang Ko ◽  
Byung-Taik Cho
Keyword(s):  
Monetary Union ◽  
Bilateral Trade ◽  
East Asian ◽  
Monetary Integration

The Effect of Membership in the European Monetary Union on Trade Between Member Countries (An Empirical Study)

2006 ◽  
Author(s):  
Ihor Soroka
Keyword(s):  
Monetary Union ◽  
European Monetary Union ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Monetary Integration ◽  
European Monetary ◽  
Trade Relations ◽  
Euro Adoption ◽  
Short Period ◽  
Short Run

The question of whether or not to adopt the euro is a very important one, not only for the 13 European Union members that do not share the same currency, but also for future EU candidates. Current literature on the effect of the euro on trade is scarce since the European Monetary Union (EMU) was officially created in 1999, and up until recently there has not been enough data to analyze this issue. This paper aims to estimate the effect of the euro on trade between member countries using the standard gravity model of trade. Using data from current 25 EU members over the period from 1997 to 2004, I show that higher trade volumes between EMU members cannot be attributed to the adoption of the euro. I find evidence that the euro adoption has had a short-run effect on bilateral trade and that this effect is eliminated over a short period of time. My findings suggest that members of the EMU trade on average from 8.8% to 47% more compared to non-members depending on the type of regression used, while members of the Free Trade Agreement trade 61.3% more. The effect of the euro on trade is eliminated as soon as I control for country-pair specific effects that include the FTA effect as well as history of trade relations between two countries. I conclude that the adoption of the euro should be seen as a final step in the European economic and monetary integration for countries that already benefit from relatively high volumes of bilateral trade. Full text availale at: https://doi.org/10.22215/rera.v2i1.166

scholarly journals The Effect of Membership in the European Monetary Union on Trade Between Member Countries (An Empirical Study)

2006 ◽  
Vol 2 (1) ◽  
Author(s):  
Ihor Soroka
Keyword(s):  
Monetary Union ◽  
European Monetary Union ◽  
Bilateral Trade ◽  
Trade Agreement ◽  
Monetary Integration ◽  
European Monetary ◽  
Trade Relations ◽  
Euro Adoption ◽  
Short Period ◽  
Short Run

The question of whether or not to adopt the euro is a very important one, not only for the 13 European Union members that do not share the same currency, but also for future EU candidates. Current literature on the effect of the euro on trade is scarce since the European Monetary Union (EMU) was officially created in 1999, and up until recently there has not been enough data to analyze this issue. This paper aims to estimate the effect of the euro on trade between member countries using the standard gravity model of trade. Using data from current 25 EU members over the period from 1997 to 2004, I show that higher trade volumes between EMU members cannot be attributed to the adoption of the euro. I find evidence that the euro adoption has had a short-run effect on bilateral trade and that this effect is eliminated over a short period of time. My findings suggest that members of the EMU trade on average from 8.8% to 47% more compared to non-members depending on the type of regression used, while members of the Free Trade Agreement trade 61.3% more. The effect of the euro on trade is eliminated as soon as I control for country-pair specific effects that include the FTA effect as well as history of trade relations between two countries. I conclude that the adoption of the euro should be seen as a final step in the European economic and monetary integration for countries that already benefit from relatively high volumes of bilateral trade.

MONETARY COOPERATION IN EAST ASIA: A WAY FORWARD

2001 ◽  
Vol 46 (02) ◽  
pp. 211-246 ◽  
Author(s):  
KEE JIN NGIAM ◽  
HAZEL YUEN
Keyword(s):  
East Asia ◽  
Monetary Union ◽  
East Asian ◽  
Practical Approach ◽  
Monetary Integration ◽  
Monetary Unions ◽  
Theoretical Justification ◽  
Monetary Cooperation ◽  
Political Background ◽  
East Asian Economies

This paper provides a theoretical justification for regional credit facilities such as currency swap arrangements in East Asia to ward off currency attacks and deter would be speculators. It also presents a case for monetary integration in East Asia. However, in view of the diverse economic, social and political background among the East Asian economies, a practical approach is to start off with a few small monetary unions rather than a large monetary union in the region. Lessons are drawn from a highly successful, but little known, monetary union between Brunei and Singapore.

China's role in East-Asian monetary integration

2005 ◽  
Vol 10 (2) ◽  
pp. 157-166 ◽  
Author(s):  
Carsten Hefeker ◽  
Andreas Nabor
Keyword(s):  
East Asian ◽  
Monetary Integration

Monetary Integration, Fiscal Divergence and Current Account Imbalances in Europe

2018 ◽  
Vol 15 (1) ◽  
Author(s):  
Gunther Schnabl
Keyword(s):  
Fiscal Policy ◽  
Monetary Union ◽  
Current Account ◽  
European Monetary Union ◽  
Exchange Rate Regime ◽  
Early Years ◽  
Monetary Integration ◽  
Fiscal Policies ◽  
European Monetary ◽  
Panel Regressions

Abstract The paper scrutinizes the role of diverging fiscal policy stances for diverging current account positions in Europe with a focus on the European Monetary Union (EMU). In a heterogeneous monetary union fiscal policy has the task to absorb asymmetric shocks to ensure the efficacy of the one-size monetary policy. It is argued that since the early years of the European Monetary Union divergent fiscal policies combined with monetary expansion constituted a major determinant of current account divergence within the euro area, which finally led into the European debt and financial crisis. Panel regressions reveal a significant impact of fiscal policies on current account positions, which to a large extent are independent from the exchange rate regime and turn out to be contingent on monetary and fiscal policy mix. Based on the findings economic policy recommendations are presented.

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.

scholarly journals Monetary integration issues in Latin America: A multivariate assessment

2008 ◽  
Vol 55 (3) ◽  
pp. 279-308
Author(s):  
Jean-Pierre Allegret ◽  
Alain Sand-Zantman
Keyword(s):  
Latin America ◽  
Exchange Rate ◽  
Business Cycles ◽  
Latin American ◽  
Monetary Union ◽  
Monetary Integration ◽  
Integration Process ◽  
Common Shocks ◽  
The Impact ◽  
Latin American Countries

This paper assesses the monetary consequences of the Latin-American integration process. Over the period 1991-2007, we analyze a sample of five Latin-American countries focusing on the feasibility of a monetary union between L.A. economies. To this end, we study the issue of business cycle synchronization with the occurrence of common shocks. First, we assess the international disturbances influence on the domestic business cycles. Second, we analyze the impact of the adoption of different exchange rate regimes on the countries' responses to shocks. .

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