Arbeitspapier

An output perspective on a northeast Asia currency union

The prospect of creating a currency union consisting of China, Japan, and Korea is evaluated using output data. After a brief discussion on the interactions between the three countries, the study investigates whether these three countries have common synchronous business cycles, which are perceived as one of the preconditions of a currency union. Then, we assess the potential costs of giving up monetary policy autonomy to form a currency union. It is found that the three national output series tend to move together in the long run and share common business cycles. While the output loss estimates depend on assumptions used to generate shocks, they tend to be small. However, there are potential conflicts between these countries on the choice of the policy target of the common monetary authorities.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 1250

Classification
Wirtschaft
Open Economy Macroeconomics
International Monetary Arrangements and Institutions
Subject
common stochastic trend
business cycles
output losses
exchange rate regime
Asian economies
Währungsunion
Konjunkturzusammenhang
Kosten-Nutzen-Analyse
China
Japan
Südkorea

Event
Geistige Schöpfung
(who)
Cheung, Yin-Wong
Yuen, Jude
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2004

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Cheung, Yin-Wong
  • Yuen, Jude
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2004

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