The suitability of a Greater China currency union

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Original languageEnglish
Pages (from-to)83-103
Journal / PublicationPacific Economic Review
Issue number1
Publication statusPublished - Feb 2005
Externally publishedYes


The study assesses the level of integration among the three Greater China economies (China, Hong Kong and Taiwan) and examines the suitability of a Greater China currency union. The three economies already have extensive trade and investment linkages. Our analyses show that they share common long-run and short-run cyclical variations. We also estimate the output costs of relinquishing policy autonomy to form a currency union. The estimated output losses, which depend on, e.g., the method used to generate shock estimates, seem to be moderate and are likely to be less than the efficient gains derived from a currency union. © 2005 Blackwell Publishing Ltd.