Optimum Currency Areas and Key Currencies: Mundell I Versus Mundell Ii

27 Pages Posted: 28 Oct 2004

See all articles by Ronald McKinnon

Ronald McKinnon

Stanford University, School of Humanities & Sciences, Department of Economics (Deceased); CESifo (Center for Economic Studies and Ifo Institute for Economic Research) (Deceased)

Abstract

The East Asian economies are increasingly integrated in trade and direct investment. More than 50 per cent of their foreign trade is with each other. Both the high growth and level of trade integration is similar to what the western European economies achieved in the 1960s. So, in the new millennium, the inevitable question arises: is East Asia also an optimum currency area (OCA)? Despite the apparent success of EMU, many writers familiar with the East Asian scene think not. Taking the seminal papers of Robert Mundell as the starting point, this article first analyses traditional theorizing on the pros and cons of international monetary integration and then suggests new approaches to the problem of international risk-sharing in OCAs.

Suggested Citation

McKinnon, Ronald, Optimum Currency Areas and Key Currencies: Mundell I Versus Mundell Ii. Journal of Common Market Studies, Vol. 42, No. 4, pp. 689-715, November 2004. Available at SSRN: https://ssrn.com/abstract=608493

Ronald McKinnon (Contact Author)

Stanford University, School of Humanities & Sciences, Department of Economics (Deceased)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research) (Deceased)

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