Register  |  Login  |  Inquiries  |  Sitemap
Advanced Search
Journal of Economic Integration 2004 September;19(3) :536-567.
DOI: https://doi.org/10.11130/jei.2004.19.3.536
Monetary Integration in East Asia: An Empirical Approach
José Brandão de Brito 
Banco de Portugal and Technical University of Lisbon
Copyright ©2004 Journal of Economic Integration
ABSTRACT

This paper investigates empirically the economic feasibility of monetary integration in East Asia. A structural VAR model is employed to decompose real output, real exchange rate and price level into a lagged polynomial of supply, demand and monetary shocks. The shocks are identified through the imposition of long-run restrictions, which are extracted from a version of Clarida and Gali's (1994) model extended in this paper to encompass the Balassa-Samuelson-effect. Once identified, the shocks are used to construct indicators relevant to monetary integration. Using the Euro-11 countries as benchmark, the overall results suggest that East Asian countries fulfil reasonably well the criteria looked at.

JEL Classification: C32, F15, F40

Keywords: Monetary integration | East Asia | optimum currency area | Balassa-Samuelson effect | structural VAR | long run identifying assumptions
Editorial Office
Center for Economic Integration, Sejong Institution, Sejong University, 209, Neungdong-Ro, Gwangjin-Gu,
Seoul, 05006, Korea
TEL : +82-2-3408-3338    FAX : +82-2-3408-3338   E-mail : jei@sejong.ac.kr
Browse Articles |  Current Issue |  For Authors and Reviewers |  About
Copyright© by Center for Economic Integration. All right reserved.