An Optimum Currency Area in South Asia: Is it Plausible?

Authors

Nilanjan Banik, Institute for Financial Management and Research, India
Basudeb Biswas, Utah State University
Peter J. Saunders, Central Washington UniversityFollow

Document Type

Article

Department or Administrative Unit

Economics

Publication Date

2006

Abstract

This article is an empirical investigation of the potential feasibility of an optimum currency area (OCA) in South Asia. Under an OCA, member countries share a common currency (like the Euro), and forego autonomy with respect to monetary policy instruments. Countries are good candidates for forming an OCA if there is a long-run relationship in the trend (permanent) component of output. Our results indicate existence of such a long-run relationship in the trend component of gross domestic product (GDP) among the member countries in South Asia. Hence, the South Asia region has the potential to form an OCA.

Comments

This article was originally published in Journal of World Trade. The full-text article from the publisher can be found here.

Due to copyright restrictions, this article is not available for free download through ScholarWorks @ CWU.

Recommended Citation

Banik, N., Biswas, B. & Saunders, P.J. (2006). An optimum currency area in south Asia: Is it plausible? Journal of World Trade 40(3), 387-405.

Journal

Journal of World Trade

Rights

© 2006 Kluwer Law International