A STUDY OF OPTIMUM CURRENCY AREA IN SOUTH ASIA
A STUDY OF OPTIMUM CURRENCY AREA IN SOUTH ASIA
초록/요약
This paper examines whether the SAARC countries satisfy the criteria to establish an optimal currency area. Some criteria of the test indicates some positive relations i.e. the existence of positive shocks in larger economies like India, Sri Lanka and Pakistan and labor mobility between countries like India, Nepal and Bangladesh. The paper shows need for more economic cooperation and suggests areas where economic cooperation could bring mutual benefits to all the members. This paper argues that the formation of a common currency in the area could only be possible by peace among countries like Pakistan and India which can be accrued through economic integration. The paper also compares this regions’ economic statistics with that of Western Europe and East Asia.
more목차
CHAPTER 1. 1
INTRODUCTION 1
1.1 The background 1
1.2 Research objectives 2
1.3 Methodology 4
1.4 Structure of the thesis 4
CHAPTER 2. 5
THEORIES AND LITERATURE REVIEW 5
2.1 Positive effects of OCA 7
2.2 Negative effects of OCA 7
2.3 Literature Review of Empirical tests on OCA 9
CHAPTER 3. 12
Origin and History of SAARC and Institutional Setup 12
3.1 Origin and History 12
3.2 Institutional Setup 12
3.3 Economic Cooperation 13
CHAPTER 4. 16
DO SAARC COUNTRIES MEET THE BASIC CONDITIONS TO FORM AN OPTIMAL CURRENCY AREA? 16
4.1 Convergence 16
4.1.1 Structural Convergence 16
4.1.2 Degree of Openness 20
4.1.3 Endogenous convergence 21
4.1.4 Pattern of Disturbances 23
4.2 REGIONAL TRADE 28
4.3 INVESTMENTS 31
4.3.1 Foreign Investment in SAARC Region 32
4.3.2 Intra-regional Investment 35
4.4 LABOR MOBILITY 38
4.5 FISCAL TRANSFERS 38
4.6 GEO-POLITICAL FACTORS 39
4.6.1 Geo-political Comparison of SAARC with other economic blocs 40
4.6.2 Economic Comparison of SAARC with other geographical regions 42
4.7 Evaluation 45
CHAPTER 5 47
CONCLUSIONS 47
Bibliography
