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Is Economic Development Promoting Monetary Integration in East Asia?

1,*,† and 2,†
Faculty of Business Administration, Toyo University, 5-28-20, Hakusan, Bunkyo-ku, Tokyo 112-8606, Japan
Faculty of Commerce and Management, Hitotsubashi University, 2-1 Naka, Kunitachi, Tokyo 186-8601, Japan
Author to whom correspondence should be addressed.
These authors contributed equally to this work.
Academic Editors: Katsuhiko Takagaki and Nicholas Apergis
Int. J. Financial Stud. 2015, 3(4), 451-481;
Received: 7 July 2015 / Revised: 21 September 2015 / Accepted: 25 September 2015 / Published: 9 October 2015
(This article belongs to the Special Issue New Challenges in Asian Capital Markets)
PDF [345 KB, uploaded 9 October 2015]


This paper tries to investigate whether there exist international integrated markets among East Asian economies, by employing the Generalized Purchasing Power Parity (G-PPP) model, then, it would help to suggest whether the East Asian region is the Optimum Currency Area (OCA) or not. The empirical results in this paper suggest that holding the G-PPP among nine Asian countries (China, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam) becomes more applicable in 2000–2013 than of that in 1984–1997. In the period of “globalization,” which is characterized by expansion of world trade, increase of international capital flows, and development of information and communications technologies, Asian economic development has been promoting not only economic integrations but also constructing the stable linkages of real exchange rates. Therefore, it would help to adopt regional coordination for monetary policies to assure the feasibility of a possible monetary union. View Full-Text
Keywords: OCA; exchange rate; M-TAR; co-integration with thresholds adjustment OCA; exchange rate; M-TAR; co-integration with thresholds adjustment
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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Kawasaki, K.; Wang, Z.-Q. Is Economic Development Promoting Monetary Integration in East Asia? Int. J. Financial Stud. 2015, 3, 451-481.

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