Basis In Reality And Path Of Monetary Cooperation In East Asia

Monetary cooperation is the core topic of the world economy and International Financial System. The process of European Monetary Integration shows that in order to achieve the equilibrium and stable development of the whole region, the real integration in goods and factors markets and the deep coordination of the monetary and financial policy are both indispensable.Optimum currency areas theory is the most famous theory in the study of regional monetary cooperation, which was conducted in a European monetary integration practice. Recent monetary cooperation in East Asia studies mostly follow up the analytical method of optimum currency areas theory and use it to analyze whether East Asia has the condition to set up the currency alliance or not. This article is based on optimum currency areas theory, and takes an analytical method of optimum currency areas index made by two U.S. scholars: Bayoumi and Eichengreen to carry on the analysis and study to the feasibility and path that monetary cooperation in East Asia. It collected the relevant macroscopical economic data of 9 economies in East Asia, used to calculate the coefficient of the equation with Eviews estimates. The projections for variables were then regressed on a constant term and we got OCA indexes between the East Asian economies. According to this results and the whole East Asia of realistic problem, this paper analyze whether it is an optimum currency area in the East Asian region as a whole. After elaborating and evaluating the cooperation frames, assumptions and current progresses, the author regard the FTA progresses in East Asia region as the impetus of monetary cooperation in East Asia and once again using the analytical method of optimum currency areas index , empirical analysis the sub-region of East Asia which would have the possible priority to progress monetary cooperation, then explored the path for East Asian monetary cooperation.