Abstract

In the sixties of the 20th century，Mundell created the theory of Optimum Currency Areas（OCA），which was improved by his followers. In 1999，the establishment of the Eurozone signified that the theory of OCA had been tested in practice. In the second half of the 20th century，as an economic region，East Asia has made great contribution to the growth of the world economy，which is still being strengthened till now. With the development of their economies，East Asian countries have attempted to conduct a series of economic and financial cooperation，such as the formation of the ASEAN Free Trade Area and China-ASEAN Free Trade Area，the signing of the Chiang Mai Initiative and the establishment of East Asian Monetary Fund. These cooperation greatly promoted regional integration in East Asia. However，East Asian countries spoke nothing about the formation of currency area. Does the economy itself affect the process of cooperation？Or does the heterogeneity in the field of economy，politics and culture hinder the process of cooperation？Or do the East Asian historical issues of World War II，territorial disputes and the lack of a dominant country all form an obstacle to the formation of a currency area？To answer these questions，this dissertation is a study of if the East Asian Economy is suitable for forming a currency area. On the basis of the definition of the concept and comments on the theory of OCA，firstly，the book shows that the gravity of each country in East Asia by geo-economics. Secondly，the book shows the feasibility of forming a currency area in East Asia from the points of view of economic growth，finance and international trade. It uses single and integrated index to test East Asian countries in order to assertain countries that are suitable for forming a currency area. Thirdly，the paper solves the problem of the poor labor flow and unbalanced development through the wage flexibility hypothesis and the relaxation of Homogeneous constraints. Lastly the paper analyzes several problems in bulding an East Asian currency area which can’t be ignored. The main contents are as follows.

The first chapter is introduction. On the basis of setting forth the background to the book，this chapter introduces briefly the finacial and currency cooperation in East Asia. In order to introduce the research purposes of the book，the chapter defines some core concepts，such as East Asia，monetary integration，currency area and economic foundation，etc.，explains the connotation and extension of integrations.

The second chapter sets forth the history of monetary integration，the OCA theory and the research framework. Firstly，this chapter presents various forms of monetary integration in history，setting forth the foundation for the formation of the Euro. Secondly，by commenting on the theory of OCA since Mundell，the paper finds out the relationship of the OCA theories and some shortcomings in practice，then the paper analyzes the research on the monetary integration of East Asia and its shortcomings. The book puts forward the analytical framework using the definition of the concepts in the first chapter.It includes three main aspects of the feasibility of monetary integration in East Asia. Firstly，it tests the feasibility of monetary integration in East Asia from the aspect of economic growth，finance and international trade. Secondly，it tests the feasibility of monetary integration in East Asia by comprehensive evaluation. Thirdly，it solves the suspicion brought by the poor labor flow and unbalanced development in East Asia.

The third，fourth and fifth chapters，discuss the feasibility of forming a currency area in East Asia from economic，finance and international trade perspectives respectively. Firstly，the third chapter discusses the geo-economics，finds that East Asian countries are good for the development of its monetary integration due to the huge gravation. Then by analyzing the convergence of economic growth this chapter finds that，for East Asian countries’ rapid economic growth，the devoloping countries in East Asia can realize Solow-style “catch up”. The fourth chapter discusses the convergence of rate，inflation，exchange rate，stock index fluctuation，deficit rate and the rate of debt burden in East Asian countries，taking the finance index as an object of study in terms of realities of situation. It discusses convergence conditions for forming a currency area in East Asian countries. The chapter shows that satisfied situation of indexes in East Asia is no less than convergence conditions of EU countries in the inception of establishment of Euro Zone. The fifth chapter analyzes that the dependence on foreign trade is essential to form a currency area，and the trade situation in East Asian countries. Then，it analyzes intra-regional trade which shows the extent of economic relationship among regional countries in East Asia. By analyzing indexes in East Asian countries，most of East Asian countries can satisfy the condition for forming a currency area.

The sixth chapter is comprehensive evaluation. Based on the analyses in the first three chapters，this chapter evaluates comprehensively the feasibility of forming a currency area in East Asia by designing a set of indexes and selecting a scientific evaluation method. The paper lists which countries are suitable for forming a currency area，which countries need some constraint conditions before joining the currency area，and which countries are not yet appropriate to join the currency area.

The seventh chapter is the analysis of factor fluidity and unbalanced development. Although it has passed the test of index，some scholars can suspect the feasibility for forming a currency area in East Asia due to poor labor mobility and unbalanced economic development. Therefore the chapter solves the problem of poor labor mobility and unbalanced development by bringing in wage flexibility hypothesis and homogeneous constraints of integration.

The eighth chapter discusses important problems in the process of monetary integration in East Asia. Most East Asian countries are suitable for forming a currency area through the test of single index and comprehensive index，so why is the process for forming a currency area so slow？There are important problems in the process of monetary integration in East Asia.If these problems can’t be effectively solved，it is not possible to form a currency area in East Asia. The first problem is how to calculate the cost of and income from forming a currency area in East Asia. The second problem is how to deal with the territorial disputes in East Asia. The third problem is what to do with the historical problems left behind by World War Ⅱ. The fourth problem is who will be the dominant country in the process of forming a currency area in East Asia. Only when these problems are effectively solved and the basic economic foundation established，can East Asia form a currency area.

The ninth chapter analyzes the impact of post-crisis era on monetary integration in East Asia，and presents the conclusion of the book.