Research On The Feasibility Of East Asian Monetary Cooperation

Economic liberalization and economic globalization lead to the increasing instability of financial system. Financial crisis took place more frequently. Especially the outbreak of the sub-prime crisis which has resulted in the global financial crisis impacted the East Asia economy so deeper and broader. At the same time, the internal contradiction of international monetary system nowadays still can not be solved. Though more and more people are on to the necessity of innovation of international monetary system, the feasible measures still have not taken yet. Under such background, East Asia has gradually realized that it is not only necessary but also urgent to reinforce the monetary cooperation.The paper which is on the basis of optimal currency area theory created by Mundell and the research findings of domestic and foreign academicians has adopted various means to do the research, such as the combinations of qualitative and quantitative method, normative and empirical method, comparative analysis and synthesis analysis. First of all, the paper analyses the feasibility of East Asia monetary cooperation, then do the further study about symmetry of economic shocks using the VAR model on the basis of previous job. At last, the author gives advices to improve the cooperations of East Asia as follows:monetary cooperation in East Asia can not simply follow the example of both the euro single currency model and the dominant currency model in Latin America. Monetary cooperation in East Asia should take strategy of building the sub-regions first, then gradient integration. At one time, China should take the lead to construct the East Asian optimal currency area.