Empirical Study on the Prospects of Asean's Trade and A Single Currency

Abstract

The paper seeks to explain the nature and prospects of trade and monetary integration in ASEAN during 1990-2017.Growth,structural breaks of Intra export and intra import shares of ASEAN including external trade were shown and influencing factors like GDP, FDI, REER,openness and inflation were regressed with them. Short run and long run causalities were observed among the said variables through cointegration and vector error correction models.Monetary integration was explained through capital market development especially in share and bond markets and in currency convertibility. Optimum currency area criterion was tested through Beta and Sigma convergence hypothesis which proved that the adoption of single currency in ASEAN is now not feasible.