economic indicators that have been observed in the correlation with the feasibility of ASEAN-10 to create a common currency area in the future.
1.2 Research Problem Formulation Figure 1.22
Research Problem Formulation
1970 Breeton Woods Break Down
U.S No Longer World’s Largest Economy Amadeo, 2008
Why is the U.S dollar weak? Tan, 2004
Global Financial Crisis: Impact on Singapore and ASEAN
Thangavelu, 2008 Weak Dollar Raises Talk of
Alternative World Currency Lynch, 2009
The five largest ASEAN countries appear to be relatively suitable to
form a monetary union and also they had appeared to meet some
of the preconditions for forming a common currency area
Ramayandi, 2005 ASEAN-7 common currency area
feasibility study by OCA is not entirely realistic to be implemented
anytime soon but there will be benefit that apply only after full
integration takes place Chaudhury, 2009
An emergence of a common currency
area in the selected East Asian economy:
a Revisit SooChoong, 2009
ASEAN+3 meets of OCA criteria to those of major EMU members, although some
economic are agreeable, China, Japan and Korea do not appear to be economically
suitable for monetary cooperation. Jikang and Yin, 2005
The ASEAN region is as suitable for the adoption of a common currency as
Europe was prior to the Maastricht Treaty.
Madhur, 2002
RESEARCH PROBLEM FORMULATION
1 IS THERE ANY FEASIBILITY FOR
ASEAN COUNTRIES TO HAVE A COMMON CURRENCY AREAS AS
THEIR OWN SINGLE CURRENCY?
2 IS THERE ANY POSSIBILITY FOR
CONVERGENCE MODEL TO BE ALTERNATIVE OF OCA OPTIMUM
CURRENCY AREA MODEL?
1.3 Objectives and Contribution of the Study The objectives of the research are:
1. To apply the convergence criteria to evaluate the prospect of common
currency area in ASEAN-10, consisting of; Indonesia, Malaysia, Singapore, Thailand, Philippines, Laos, Brunei Darussalam, Cambodia,
Myanmar, Vietnam. 2.
To investigate the feasibility of ASEAN-10 common currency area through six economic indicators through time period 1992-2009 for almost
all economic indicators, except GFER that were only available in 1992- 2007 because officially Brunei Darussalam government did not publish
foreign exchange reserves in 2008 and 2009 Department of Foreign Affairs and Trade of Australian Government, 2010, the six economic
indicators are; a.
CPI : Consumer Price Indices
b. RER
: Real Exchange Rate in US dollars c.
GFER : Growth rates of Foreign Exchange Reserves
d. GRVT
: Growth rates of Real Volume of Trade e.
GRRVT : Growth rates of Real Relative Volume of Trade f.
GRYPC : Growth rates of Per Capita Real GDP at factor cost
This study will contribute:
1. This study examines the feasibility in term on prospect, of common
currency area by convergence criteria, in which not many studies have
used economic convergence modeling techniques to examine the prospects of having a common currency area in ASEAN Kraiwinee, 2003.
2. This research develops an advanced or further research from previous
studied that observed ASEAN-7, which suggests for advance study that covers a full integration of Southeast Asian countries Chaudhury, 2009.
3. This paper also takes into account the impact of East Asian financial crisis
in 1997-1998 and Global financial crisis in 2007-2008, both of the historical crises combined become one in each of the time period
observation in this figure, so there will be a comprehensive figure both of historical effect and impact to each economic indicators that have been
observe in the correlation with the feasibility of ASEAN-10 to create a common currency area in the future.
1.4 Research Outlines CHAPTER I
