CHAPTER III DATA AND METHODOLOGY
3.1 Research Variables and Operational Definition
Operational definition is a kind of definition which gives to some variables or the constructs meaning or activity specification, or gives an
operational which is needed to measure the construct or the variables Nazir, 1998. As a guidance to this research and in order to create hypothesis test. It
means that we need to explain the variable that we use. Pitchford and Cox, 1997 excerpt from Rasheed and Ahmed, 2007 edited the European Monetary
Union EMU principles for launched single currency for Europe. According to them, the indicators like real income per capita, call money rate, consumer
price index, real exchange rate, exports, imports and balance of payments are vital. In this study we have included the volume of trade both for the country
as a specific and as a world relative index. We used the following data series to apply the beta convergence criteria to evaluate the possibility of the
formation of a single currency in ASEAN countries. The list of the selected variables is as follows;
1 Consumer price indices CPI
Consumer price indices in this research means as an inflationary indicator that measures the change in the cost of a fixed basket of products
and services, including: housing, electricity, food, and transportation. Consumer price indices also mean as an index of prices used to measure the
change in the cost of basic goods and services in comparison to a fixed base period, which is also called, cost-of-living-index.
2 Real Exchange Rates in US Dollar RER
Real exchange rates in US Dollar in this research means as the price of one currency expressed in terms of U.S. Dollar which is adjusted for
inflation.
3 Growth rates of foreign exchange reserves GFER
Growth rates of foreign exchange reserves in this research means as the amount of increase of a deposit of a foreign currency of other countries as
assets which allow a government to keep their currencies stable and reduce the effect of economic shocks.
4 Growth rates of real volume of trade GRVT
Growth rates of real volume of trade in this research means as the amount of increase of the number of shares, bonds or contracts, traded during
a given period. For a security, or an entire exchange that are adjusted for inflation.
5 Growth rate of a real relative volume of trade GRRVT
Growth rate of a real relative volume of trade in this research means the amount of increases of a measurement of one investment or financial
instruments value relative to another’s in the number of shares, bonds, or contracts which were traded during a given period for a security or an entire
exchange that adjusted for inflation.
6 Growth rate of real per capita GDP at factor cost GRYPC.
Growth rate of real per capita GDP at factor cost in this research means as the amount of increase an approximation of the value of goods
produced per person in the country’s GDP divided by the total number of people in the country at the total money, time and resources of a firm engaged
in the business of financing accounts receivable which is the activity known as factoring with a purchase or activity that were adjusted for inflation.
3.2 Population and Samples
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