Is Regional Monetary Cooperation a Prerequisite for Commercial Integration in Asia?

Lee, Kang-Soek

Is Regional Monetary Cooperation a Prerequisite for Commercial Integration in Asia? - 2005.


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This paper assesses the influence of exchange rate volatility on intra-regional trade among Asian countries. Results indicate that exchange rates stabilization through regional monetary cooperation is an important challenge, perhaps even a prerequisite, to a deepening of trade integration across the region. An analysis relates volatility, estimated through an ARCH/GARCH process, to trade within a gravitational model.

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