The Formation And Development Of The Theory Of Optimum Currency Areas-the Practice And The Prospect Of Monetary Integration

This paper aims at giving a comprehensive introduction to and deep analysis of the theory and practice of monetary integration. With the development of economic integration, the wave of global monetary cooperation is sweeping across the world. Dollar and "Euro" have attracted great attention. The birth of Euro in particular is a shock to the world creating a new situation in the international monetary system and makes monetary integration from theory to practice. In addition to the Euro integration, Asian monetary cooperation has also attracted a lot of attention.This paper detailed introduces and objectively assesses the birth, development and breakthrough of the theory of optimum currency areas. First, this paper takes the 1980s as a cutoff point and the theory of Optimum Currency Areas is divided into traditional and modern theory of optimal currency areas. Second, the traditional theory of Optimum Currency Areas is divided into the theory of Optimum Currency Areas in 1960s and 1970s. The theory of Optimum Currency Areas in 1960s focuses on the standard analysis of the appropriate scope of optimal currency area. Then, in 1970s the main research converges on the costs and benefits of joining optimal currency areas, the theory of Optimum Currency Areas in 1960s and 1970s are the core and basic method of theory of Optimum Currency Areas. However, the development of modern theory of Optimum Currency Areas is quite complex. This paper generally divides it into two stages, theoretical improvement from 1980s to the early 1990s and combination of theoretical research and empirical demonstration from 1990s, and this paper also introduce and evaluate the major achievements of modern theory of Optimum Currency Areas which put forward a major step forward, so that it will become increasingly sophisticated theory.As any theory and ideas is a result of the development of practice and has its theoretical origins, Theory of Optimum Currency Areas is no exception. Theory of Optimum Currency Areas has its root in the ideological predecessors of the common currency. The birth of this theory is a theoretical reflection of the practice of monetary cooperation. And the practice of monetary cooperation is the intrinsic motivation for further development of the Theory of Optimum Currency Areas.On the basis of theoretical research, this paper refers to dollarising and cooperation or integration of Euro currencies in the existing international monetary system, compares the various stages of the entire process of the birth of the Euro with Asia, and analyses Asian monetary cooperation, the feasibility of eventual integration and the preparation needed. Meanwhile, this paper gives personal opinions on the feasible road of Asian Monetary integration and how to cooperate between china and other Asian countries.