TY - JOUR
T1 - Assessing the feasibility of monetary integration in the former Soviet republics
AU - Kan, Denis
AU - Andreosso-o'callaghan, Bernadette
AU - Lenihan, Helena
PY - 2011/3
Y1 - 2011/3
N2 - The disintegration of the USSR brought with it a turbulent period of transition for the newly emerged independent states. This initiated a process of economic decentralization and a re-allocation of resources. Various regional formations aiming to create a single market or even a common currency area have been proposed amongst the former Soviet states. Despite this, very little in terms of economic integration has been achieved so far. Economies within the CIS are divergent in terms of size and economic structure, with external shocks being more prominent for regional countries. The empirical analysis provided here examines the sustainability of optimum currency area arrangements within the IS.The results present weak evidence to support monetary arrangements in the region, nonetheless some evidence was found for Russia-Belarus and to some extent Russia-Kazakhstan. Russia remains the dominant, most diversified and advanced economy in the region. In the case of a monetary union with regional countries, the union is likely to happen by absorption. External shocks have divergent effects on regional countries; the differences to a large extent are attributed to the magnitude of responses, further weakening the argument in favour of the OCA in the region.
AB - The disintegration of the USSR brought with it a turbulent period of transition for the newly emerged independent states. This initiated a process of economic decentralization and a re-allocation of resources. Various regional formations aiming to create a single market or even a common currency area have been proposed amongst the former Soviet states. Despite this, very little in terms of economic integration has been achieved so far. Economies within the CIS are divergent in terms of size and economic structure, with external shocks being more prominent for regional countries. The empirical analysis provided here examines the sustainability of optimum currency area arrangements within the IS.The results present weak evidence to support monetary arrangements in the region, nonetheless some evidence was found for Russia-Belarus and to some extent Russia-Kazakhstan. Russia remains the dominant, most diversified and advanced economy in the region. In the case of a monetary union with regional countries, the union is likely to happen by absorption. External shocks have divergent effects on regional countries; the differences to a large extent are attributed to the magnitude of responses, further weakening the argument in favour of the OCA in the region.
KW - Cis
KW - Integration
KW - Optimum currency area
UR - http://www.scopus.com/inward/record.url?scp=79952419560&partnerID=8YFLogxK
U2 - 10.1080/10168737.2010.487538
DO - 10.1080/10168737.2010.487538
M3 - Article
AN - SCOPUS:79952419560
SN - 1016-8737
VL - 25
SP - 63
EP - 89
JO - International Economic Journal
JF - International Economic Journal
IS - 1
ER -