Economic And Currency Integration In East Asia

Since the last decade of 20th century , economy globalization and region integration have been the key characteristics of the world. Governments faced different outside environments and conditions to achieve more economic progress ,finance crisis was frequent ,and the international currency system face the unprecedented challenges. In order to avoid the financial shocks and maintain stabilization of economy, monetary cooperation and integration have become the dominant direction of region development. East Asia has been seeking an effective way in the regional monetary cooperation ever since the financial crisis in 1997.The researches on economy and currency integration of East Asia are carried out from two visual angles: static analysis and dynamic analysis. In the static analysis frame, such guide lines as GDP, inflation rate, unemployment rate, factor liquidity are used to judge if East Asia has met the conditions of Optimum Currency Areas(OCA).In the dynamic analysis frame, currency integration is looked upon as an endogenous progress. Endogenous mechanism can optimize the OCA criteria, so "countries which join EMU, no matter what their motivation may be, may satisfy OCA properties ex-post even if they do not ex-ante!" (Frankel and Rose 1997).In the last chapter, we draw a conclusion about the route of economy and currency integration of East Asia based on the analysis above.