Working Papers, Department of Economics, Lund University
Is China an Optimum Currency Area?
(), Karin Olofsdotter
() and Lars Söderström
Abstract: This paper analyzes regional differences across Chinese
regions, employing an optimum currency area framework. Empirically, we
consider the cross-sectional correlation measure of Solnik & Roulet (2000)
when examining data on GDP, trade, inflation and regional budget between
1991 and 2001. Our preliminary results suggest that China probably is more
of an optimum currency area than first expected. It is debatable, though,
whether Hong Kong and Macao are appropriate as candidates. The results also
indicate that there might be other constellations of regions that could be
closer to an optimum currency area than the current Yuan area.
Keywords: China; optimum currency area; regional developments; cross-sectional correlation; (follow links to similar papers)
JEL-Codes: C32; F33; O53; (follow links to similar papers)
34 pages, January 25, 2005
- This paper is published as:
Byström, Hans, Karin Olofsdotter and Lars Söderström, (2005), 'Is China an Optimum Currency Area?', Journal of Asian Economics, Vol. 16, No. 4, pages 612-634
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