Excerpt
Content
Abbreviations
1. Introduction
2. Theoretical Framework
2.1. The Classical Theory of OCA
2.2. The New Endogeneity Approach of OCA
2.3. Critique
3. Data Set and Methodology
3.1. Selection of OCA Criteria
3.2. Key Figures: Calculation, Sources and Characteristics
4. OCA Characteristics of the PRoC
4.1. Market Size
4.2. Production Diversification
4.3. Stability and Predictability of Prices
4.4. Price Flexibility
4.5. Wage Flexibility
4.6. Interprovincial Trade
4.7. Production Similarity
4.8. Labor Mobility
4.9. Capital Mobility
4.10. Convergence of Prices
4.11. Synchronicity of Business Cycles
4.12. Fiscal Transfers
4.13. Summary: Is the PRoC an OCA?
5. Are there any Lessons for the EMU?
5.1. Problems of the EMU as a Common Currency Area and its Causes
5.2. What are the Crucial Distinctions between the EMU and the PRoC as Common Currency Areas?
5.3. Is There Something to Learn for the EMU?
6. Conclusion
Tables
Figures
References
Declaration of Academic Honesty
Abbreviations
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1. Introduction
The RMB (人民币) is the legal tender of the PRoC (People Republic of China) excluding Macao, Hong Kong and Taiwan.[1] It was introduced by the Communist Party even one year before Mao Zedong proclaimed the PRoC at the top of the Gate of Heavenly Peace on October 1st, 1949.[2] However, the history of Chinese money goes back a long way to about 3000 B.C. At that time the bartering system was replaced for the first time by the use of cowry shells in today’s Qinghai province.[3] Two millenniums later, under the ruling emperor of the Zhou Dynasty, the first treasury department was founded to regulate centrally the domestic currency.[4]
In contrast to the PRoC, the EMU (European Monetary Union) exists for only a few years. In 1999 eleven countries introduced the Euro as its official accounting currency. Three years later euro coins and banknotes replaced the former cash in circulation. Until the 1st January 2011 the number of participating member countries increased to 17.[5] Despite such a short period, the EMU has already faced a severe crisis in its early history without finding any substantial therapy so far.[6]
I assume that the western provinces of the PRoC, that are supposed to be comparatively economical weak to the provinces of the Chinese east coast, are similar to the unstable South-European member countries of the EMU. The coastal provinces, instead, are similar to the stable North-Middle-European member countries of the EMU. All in all, there are supposed to be macro economical inequalities within both currency areas that make it difficult to sustain a common currency. Accordingly, it is rather interesting how the PRoC managed to survive such a long time with a common currency without breaking apart and the EMU faces such a threat roughly a decade after its establishment.
One may wonder whether it could be also feasible to examine and compare the two currency areas. If there were any upcoming results that could help European authorities to assess the causes of the Euro Crisis better, countermeasures are rather likely to work, or at least to work more effectively. In the case of the ECB (European Central Bank), for instance, it is highly relevant to find out whether the EMU is an OCA (Optimum Currency Area) or not. If the EMU was not an OCA, it is inappropriate for the ECB to act as a lender of last resort in order to safeguard the funding of deficit member countries. Then, the ECB had to adapt permanently structural inequalities between stable and unstable member countries due to a lack of adjustment mechanism. This results in higher expectations of inflation and, in the long run, in higher inflationary pressure which violates the ECB’s primary objective to ensure price stability.[7] Additionally, it would be beneficial to find out any suggestions how the EMU could improve conditions to become an OCA and, therefore, to excuse a bailout purchase of European government bonds by the ECB as a temporary intervention.[8]
The main objective of this thesis is to find out whether the PRoC is an OCA and what does it mean for the EMU. Based on the differences between the two currency areas, I would like to discuss whether there are any lessons that are worthwhile to be learned from the PRoC by the EMU to face better current and future crises. Therefore, the thesis is organized as follows. Section 2 provides an overview of the theoretical framework which this bachelor thesis is based on, namely the theory of OCA. Section 3 explains the methodology of my empirical study and describes the used data set. Section 4 examines the PRoC as an OCA. I evaluate each criterion on the basis of my own empirical study or available literature. After I briefly analyzed the Euro Crisis in section 5, I compare the EMU with the PRoC on the basis of OCA criteria followed by a discussion why there are differences and whether the EMU could improve conditions as a common currency area by learning from the PRoC. Section 6 concludes my findings and relate them to my opening questions of this introduction.
To avoid any confusion in advance, I would like to delineate, in further detail, the two currency areas that are subject of this thesis. Since this thesis is about areas which share a common currency, I define the Chinese currency area as Mainland China. Mainland China refers to the PRoC excluding those provinces where the official currency is not the RMB, namely Anhui, Fujian, Gansu, Guangdong, Guizhou, Hainan, Hebei, Heilongjiang, Henan, Hubei, Hunan, Jiangsu, Jiangxi, Jilin, Liaoning, Qinghai, Shaanxi, Shandong, Shanxi, Sichuan, Yunnan, Zhejiang, Guangxi, Nei Mongol (Inner Mongolia), Ningxia, Xinjiang Uygur, Xizang (Tibet), Beijing, Chongqing, Shanghai and Tianjin.[9] As the European currency area I define all countries that are member of the EMU at the time of writing this thesis, namely Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Austria, Portugal, Finland, Greece, Slovenia, Cyprus, Malta, Slovakia and Estonia.[10]
2. Theoretical Framework
2.1. The Classical Theory of OCA
Pioneered by Robert A. Mundell’s “A Theory of Optimum Currency Areas” in 1961, a new scientific approach was established that examines whether it is beneficial for countries to let national currencies float against each other or to establish a single currency area without fluctuation. In other words, what is the optimal domain of a currency area or, respectively, for which areas is it beneficial either to share a common currency or to peg the currencies to each other.[11] The name of the theory consists of 2 crucial components that Mundell highlights. First of all, he defines optimality. Accordingly, optimality implies adjustment mechanism between areas excluding flexible exchange rates within a currency area that causes not a trade off relationship between particular sub areas regarding macro economical objectives, e.g., high level of employment, stability of price level or even a balanced BoP (Balance of Payments).[12] One may wonder about the necessity of adjustment mechanism. Adjustment mechanisms between areas are highly relevant to absorb asymmetric shock between those areas, if flexible exchange rates are abolished.[13] Secondly, Mundell distinguishes between national and regional areas. National areas are divided by international borders that do not automatically resemble equal macro economical patterns of their sub areas. These so-called regional areas with equal patterns may stretch across international borders so that if there were any asymmetric shocks, e.g., a shift of productivity between two regions, stretching across the borders of two countries, a “(…) flexible exchange rate system does not serve to correct the balance-of-payments situation between the two regions (which is the essential problem) although it will do so between the two countries (…)”.[14] Since the two countries disregard the definition of optimality, a replacing of national currencies for regional currencies could serve to solve the BoP situation. Hence, an OCA matches with regional areas but not always with national areas.[15]
McKinnon developed the definition of OCA further by relating it to fiscal and monetary policy as well as external exchange rates. Thus, an OCA is ”(…) a single currency area within which monetary-fiscal policy and flexible external exchange rates can be used to give the best resolution of three (sometimes conflicting) objectives:”.[16] As objectives he names, similar to Mundell, the maintenance of full employment, a balanced BoP and a stable price level. Whereas a stable price level also implies a stable and liquid currency to ensure an efficient allocation of resources.[17] To guarantee a liquid currency, the domain of an OCA should not be below a crucial market size to avoid capital exports to larger sized currency areas. Since the capital exports were caused by a liquidity premium, investors are willing to pay for, and not by real economical considerations, small currency areas tend to finance the BoP deficit of large currency areas although the usage of capital is rather efficient within the small currency areas.[18]
To assess whether a regional area is an OCA, a simple cost-benefit-calculation is necessary. The costs and benefits resulting from common currencies are deeply connected with the degree of economic integration potential participants of an OCA share.[19]
Benefits from joining a common currency area are actually trade benefits that derive from reduced transaction costs, greater transparency, abolition of currency risks and simplified calculations of potential participants that arise from exchange rates and its volatility. The higher the volume of interregional trade that two potential participants share the higher is the gain from reduced costs. It is much the same for migrant workers and cross border investments. If laborers can work freely across national borders, wages, received abroad, become more stable in relation to the domestic price level. Investors benefit from more predictable return on investments from abroad. All in all, the higher the degree of economic integration the higher are the benefits of regional areas to join a common currency, as long you presume a stable and predictable price level; otherwise the imported higher variability of price level would neutralize the gain from reduced costs.[20]
Costs from joining a common currency area derive from abandoning its autonomy in monetary policy as well as the buffering function regarding relative competiveness of flexible exchange rates. In the latter case, flexible exchange rates absorb disturbances in the national output and, therefore, also employment disturbances caused by a shock of aggregated demand or supply. Since a depreciation of the domestic currency will improve domestic competiveness, exports will increase and the economy will recover soon. Moreover, it limits a country’s ability to use the adjustment mechanism against non members of the common currency area. To use this healing mechanism effectively, the supply or demand shock has to affect the whole common currency area. Otherwise the domestic currency remains rather stable because the external exchange rate is determined by the weighted sum of all members, whereas equal competiveness within the common currency area cannot be restored anyway. It is rather likely that all participants are affected by those shocks if the economies are well integrated into each other through, e.g., a high volume of interregional trading. Furthermore, a high degree of labor mobility within the common currency area helps laborers to find a new employment in other regions of the common currency area. The same applies to a high degree of capital mobility because it becomes easier for investors to allocate their capital more efficient within the whole territory. Hence, a high degree of labor and capital mobility helps to fight unemployment. In addition to giving up this advantage of flexible exchange rates, the influence of counter measures by monetary authorities on the domestic output is lacking since monetary policy affects the whole currency area and not the actual affected subregional areas. In contrast to benefits of common currencies, the higher the degree of economic integration the lower are the costs of regional areas to join a common currency.[21]
In accordance with the assumptions about benefits and costs of common currencies, the determination of criteria to evaluate whether regional areas profit from a common currency must be mainly derived from the degree of economic integration regional areas share with each other. The higher the degree of economic integration the higher are the benefits regional areas gain from joining the same currency. The crucial point is to determine the breakeven point of regional integration, namely the degree of economic integration at which the benefits start to exceed the costs of common currencies, represented by 0 in Figure [1]. Consequently, all regions that share a higher degree of economic integration than 0 are predestinated to forge an OCA.[22]
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Figure [1] The-BB-CC-Schedules
According to Kenen, there is another crucial criterion to assess optimality; but the degree of economic integration. Kenen argues that the degree of product diversification is more relevant rather than labor mobility, as it is Mundell’s main point. The following lines of arguments rely on the assumption that the causes of disturbances do not arise from normal business cycle movements; but from asymmetric shocks.[23]
First of all, highly diversified economies do not have to change trade patterns as often as less diversified economies. Since there were a large number of diverse products, the individual products are supposed to be independent from each other. Thus, a disturbance caused by external demand or technology, is cushioned by the large number of other produced goods and services. Therefore, a highly diversified economy does not have to undergo frequent changes in terms of trade patterns and exchange rate adjustments because the economic output is rather stable. However, Kenen admits that the random process, he assumes for this point, does not always average out perfectly external shocks in reality.[24] Secondly, the increase of unemployment in highly diversified economies is not as perceptible as in less diversified economies. Following up the first point, a highly diversified economy will not suffer such a drastic increase of unemployment as less diversified economies because a diversified structure of economic output is more stable. Moreover, it tends to support internal labor mobility since a high variation of products increases employment opportunities for specialized laborers. Otherwise, it is hard for an individual to find a job opportunity that is short of his or her specialization.[25] Lastly, the linkage between external and domestic demand is weaker in highly diversified economies than in less diversified economies because those areas are more self sufficient so that, for instance, imported variations of employment will not be accompanied by shifts of capital allocation. Assuming an economy working with full use of its capacity, an additional increase of external demand will create inflationary pressure. This inflationary pressure will be accelerated by, firstly, a multiplier effect and, secondly, by an increase of foreign investments to satisfy the additional demand abroad. Since a highly diversified economy have a rather small aptitude to import, external shocks will not slop back and, therefore, ease the pressure on domestic policy.[26]
To summarize Kenen’s point of view in his own words: ”Fixed rates, I believe are most appropriate – or at least inappropriate - to well diversified national economies.”[27] Furthermore, well diversified economies “(…) maximize the number of employment opportunities for each specialized variety of labor”.[28]
2.2. The New Endogeneity Approach of OCA
The classical theory of OCA is based on an ex ante view. The objective is to find out whether it is beneficial for potential participants of a common currency area to join or not. The endogeneity approach replaces this view by an ex post view and asks how a joining of a common currency area changes conditions of suitability regarding a common currency.[29] Originally introduced as a critique to the classic theory by Frankel and Rose in 1996[30], the endogeneity approach argues that international trade patterns and international business cycle correlations are given endogenous. After joining or even after undertaking steps towards a common currency area, countries that could not satisfy OCA criteria in advance might do it afterwards, due to an endogenous improvement of conditions. For instance, the liberalization of trade, which usually falls in line with joining a common currency area, promotes interregional volume of trade and, therefore, also tighter business cycle correlations.[31] The increase of business cycle correlation in conjunction with a higher volume of interregional trade makes it rather beneficial for member countries to share a common currency because of gains in trade and the reduction of asymmetric shocks. Figure [2] illustrates the trade-off relationship between income correlation, in the broader sense business cycle correlation, and the degree of openness, which contains the interregional volume of trade. The descending line describes all equilibriums for that the costs and benefits of a common currency are balanced. All common currency areas above this line are OCAs. All currency areas below this line are not OCAs. In accordance with the assumption about improving conditions if areas agree to join a common currency area, a common currency area moves, over time, closer to the area of OCAs.[32]
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Figure [2] Endogeneity approach of the OCR theory
In contrast to that, many scholars argue that a higher level of trade integration results in less tight business cycle correlation because regional areas, which share a high volume of trade increase their level of industrial specialization.[33] This phenomenon is in accordance with David Ricardo’s comparative advantage law.[34] Thus, regional areas specialize in certain kind of products for which they have a comparative advantage against their trading counterparties. Since members of a common currency area become more diversified, they are rather vulnerable to asymmetric shocks and less correlated in their business cycles. On the other hand, David Ricardo’s law basically relies on the assumption of increasing economies of scales. Whereas this assumption was true in the past, nowadays it lost its importance because economies of scale cannot be applied to service dominated economies as much as to industry dominated economies of the past.[35]
However, there are not only endogenous factors that matter. A change of exogenous factors such as flexibility of products and factor markets can shift the equilibrium line across the graph. Obviously, not only common currency areas can move but also the equilibrium line across the graph.[36]
2.3. Critique
Across the years the theory of OCA has become often criticized for its assumptions. In this thesis I consider the criticism as a complement to the theory to ensure a holistic analysis. It is by no mean evidence for inadequacy to apply the theory to the subject matter. The criticism is often as follows.
Firstly, to equalize national differences the adjustment mechanism of flexible exchange rates might not only be ineffective, but also a handicap if politicians misapply its use.[37] Secondly, the ability of flexible exchange rates to absorb asymmetric shocks is exaggerated because exchange rate changes have no stable influence on output and employment. In this context, volatile exchange rates are rather causes and not, as assumed in the theory of OCA, the therapy of asymmetric shocks.[38] Thirdly, whereas monetary policy becomes a matter of a supraregional monetary authority, it is often overlooked that fiscal and economic policies remains sovereign to its members. A supraregional fiscal authority would be helpful to ease asymmetric shocks and is for that the most effective method, due to the Keynesian theory, especially during a liquidity trap. Additionally, a supraregional authority that would be responsible for fiscal, economic and legal issues could stimulate factor markets to become more flexible. If these responsibilities remain to the single members, it is even possible that members intervene against each other and could, therefore, neutralize their measurements.[39]
3. Data Set and Methodology
3.1. Selection of OCA Criteria
Although there is not a consensus about a single set of criteria that determine an OCA, I would like to compile a catalog of criteria that indicate the degree of economic integration or the ability to absorb asymmetric shocks independently. Due to a lack of many data availabilities, I cannot cover all criteria with own empirical results. It was an ambitious approach for future studies to find creative solutions for the lack of data. In this case, I evaluate the criterion just on the basis of already available literature. After I finished my empirical work, I assessed the used data sets as not always perfectly consistent but still valid due to only sporadic discrepancies.
The first catalog of criteria is province specific which determines how a province can absorb asymmetric shocks independently to reduce costs of a common currency area:
- Market size of the currency area
- Production diversification
- Stable and predictable prices
- Price flexibility
- Wage flexibility
Due to McKinnon a currency areas should not fall beneath a crucial size to keep the currency liquid.[40] Therefore, I assess the RMB market size by the share of worldwide foreign exchange turnovers and the size of the Chinese economy measured by the GDP (Gross Domestic Product).
As Kenen highlights, I measure the degree of production diversification because a high number of products cushion product specific disturbances and increase internal labor mobility.[41] To measure production diversification I analyze yearly total output figures of industries.
Since the condition of stable and predictable prices is an important assumption that non exchange rate related adjustment mechanism work effectively[42], I determine how stable and predictable prices are by analyzing provincial consumer price inflation. Furthermore, I assume that if prices are stable and inflation rates not volatile they are predictable as well.[43]
On the other hand, I assume that as higher and more volatile the inflation rates as more flexible are prices because of a higher frequency of price adjustments.[44] In the following, I am aware of this tradeoff between the assumption of price stability and price flexibility but due to limited space I do not discuss it in further detail. Moreover I assume that as higher the inflation rates as more effective is the adjustment mechanism due to lower price stability.[45] Based on the assumption that reverse price changes among members of a common currency area can mitigate asymmetric shocks by redistribution of relative competiveness[46], I evaluate the degree of price flexibility by using consumer price inflation rates.
Flexible wages can redistribute relative competiveness among members of a common currency area as well. If a participating member with a high unemployment is able to reduce its level of wages, the price level declines as well. This increases the relative competiveness against other members and, thus, lowers unemployment.[47] Therefore, I evaluate wage flexibility by the usage of growth rates between the unemployment rate and the nominal growth rate of wages per employed person in each Chinese province. I assume high negative correlations between unemployment rate growth and wage growth per employed person as an indication for high wage flexibility et vice versa.[48]
The second catalog of criteria determines a province’s benefit by interprovincial trade integration or how a province can absorb asymmetric shocks by other determinants of provincial integration to reduce costs of a common currency area:
- Trade integration / interprovincial trade
- Similarity of production
- Labor mobility
- Capital mobility
- Convergence of inflation
- Synchronicity of business cycle
- Fiscal transfers
As a key figure to assess openness of an economy to other economies[49], my assessment about trade integration is based on literature which concerns with interprovincial trade flows and trade barriers.
Based on the idea that it is far easier for an unemployed to find a new employment in the same sector, I enhance Kenen’s idea of production diversification and measure the similarity of production structure because a high similarity of production structure boosts the labor mobility between regional areas.[50] A high degree of product similarity also tends to increase business cycle correlation because regional areas producing a similar kind of product will be affected both by a product specific shock.[51] For this purpose, I use yearly year-to-year total output figures of industries.
Mundell stresses factor mobility between regional areas as the main mechanism to adjust asymmetric disturbances.[52] First of all, I calculate my key figure to assess labor mobility by considering migration flows between provinces. Since I could not ensure a holistic analysis due to too many missing data of provinces, I, secondly, focus my evaluation about capital mobility on selected literature, which all rely on the Feldstein-Horioka hypothesis that perfect worldwide capital mobility imply independency between domestic savings and domestic investments because domestic savings would seek the highest worldwide risk adjusted return on capital and, reversely, domestic investments would be financed by a worldwide pool of savings.[53] If capital mobility does not exist perfectly, investors would be constrained by institutional barriers as well as a home bias so that domestic investments would be correlated with domestic savings.[54]
Convergence of prices plays a major important role. In accordance with the law of one price, in a highly integrated market there should be only one price for goods and services, if products are tradable and transaction costs minimal. If inflation rates among members of a common currency area are unequal, the relative competiveness among those members shifts apart. This effect can be even reinforced by resulting real interest rate differentials so that a common monetary policy becomes too tight for those members experiencing low inflation and to loose for those experiencing high inflation.[55] Therefore, I analyze consumer price inflation rates on synchronicity in movements and similarity in differences.
Synchronicity of output growth rates matter because fast growing regional areas are rather likely to expand the amount of imported goods, e.g., commodities and faster than slower growing regional areas. To equalize the BoP, the country’s exports have to grow as fast as the imports. Since an abolition of flexible exchange rates, due to a common currency, makes it harder to gain competiveness by real depreciation, a regional area would be forced to slow down its economic growth. Although many economists argue that there is no significant evidence,[56] I still compute the output growth correlation because it indicates how members of a common currency area are associated with business cycles in order to fight effectively, for instance with a common monetary or fiscal policy, output disturbances. Additionally, it is a good indicator to assess intraindustry integration because specific sectors are closer linked to each other with more extensive trade patterns.[57]
Based on literature as well as on figures of provincial revenues and expenditures, I take a look at the fiscal system of the PRoC.[58] The fiscal system is in general, due to the critique about the OCA theory, the most important instrument to ease asymmetric shocks. Therefore, I compare, by analyzing provincial governmental revenues and expenditures, the fiscal capacity of provincial governments. Furthermore, I put the revenues in relation to expenditures as an implicit indicator for fiscal transfers between provinces.
3.2. Key Figures: Calculation, Sources and Characteristics
Production Diversification
The production diversification for each province is calculated as follows.
illustration not visible in this excerpt
Si,t is the share in total output of sector i at a time t.[59] For the computation of , I use the sum of seasonally not adjusted year-to-year total output of primary, secondary and tertiary industry of each Chinese province from 1993 until 2011. The observed period coincides with the acceleration of economic liberalization policy after Deng Xiaoping’s southern tour.[60] Hence, I calculate as follows.
illustration not visible in this excerpt
Gi,t is the total provincial output of sector i at time t. The data are downloaded from Thomson Reuters Datastream Advance 4.0, retrieved on 23/07/2012. Datastream named the National Bureau of Statistics of China as the primary source. The calculated diversification of a province can range from 33 to 100. The lower the value the higher is the degree of diversification. In order to compromise, I compute the arithmetic average, standard deviation, maximum and minimum value of each year for all provinces. The figures are rounded to 2 digits after the decimal point.
Stability and Predictability of Prices
To evaluate stability and predictability of prices, I compute the arithmetic average and standard deviation of monthly consumer price inflation to the previous year for each province for the period from January 1999 to June 2012. The used time series are retrieved from Thomson Reuters Datastream Advance 4.0 on 22/07/2012. The primary source has been the National Bureau of Statistics of China which provides monthly and seasonally not adjusted figures. The percentages are rounded to 2 digits after the decimal point.
Price Flexibility
I compromise the results of subsection ‘4.3. Stability and Predictability of Prices’ further by computing the arithmetic average, standard deviation, maximum and minimum value of the averages and standard deviations of Chinese provinces regarding consumer price inflation. The percentages are rounded to 2 digits after the decimal point as well.
[...]
[1] Cf. Bundeszentrale für politische Bildung (2012a)
[2] Cf. The Central People’s Government of the People’s Republic of China (2012a)
[3] Cf. Peng, K./Zhu, Y. (1995), p. 6
[4] Cf. Gruen, S. (2004), p. 2
[5] Cf. European Central Bank (2012a)
[6] Cf. Winkler, A. (2012), p. 449
[7] Cf. Straubhaar, T./Vöpel, H. (2012a)
[8] Cf. Vöpel, H. (2012)
[9] Cf. CIA World Factbook (2012a)
[10] Cf. European Central Bank (2012a)
[11] Cf. Mundell, R.A. (1961), p. 657
[12] Cf. Mundell, R.A. (1961), p. 658 et seq.
[13] Cf. McKinnon, R.I. (1963), p. 718 et seqq.
[14] Mundell, R.A. (1961), p. 660
[15] Cf. Mundell, R.A. (1961), p. 659 et seq.
[16] McKinnon, R.I. (1963), p. 717
[17] Cf. McKinnon, R.I. (1963), p. 717
[18] Cf. McKinnon, R.I. (1963), p. 722 et seq.
[19] Cf. Löchel, H. (1998), p. 6 et seq.
[20] Cf. Löchel, H. (1998), p. 7 et seq.
[21] Cf. Löchel, H. (1998), p. 9 et seqq.
[22] Cf. Löchel, H. (1998), p. 12
[23] Cf. Kenen, P.B. (1969), p. 49
[24] Cf. Kenen, P.B. (1969), p. 49 et seq.
[25] Cf. Kenen, P.B. (1969), p. 54
[26] Cf. Kenen, P.B. (1969), p. 52 et seq.
[27] Kenen, P.B. (1969), p. 54
[28] Kenen, P.B. (1969), p. 54
[29] Cf. Löchel, H./Baumann, S. (2006), p. 7
[30] Cf. Frankel, J.A./Rose, A.K. (1996)
[31] Cf. Frankel, J.A./Rose, A.K. (1996), p. 21 et seq.
[32] Cf. Löchel, H./Baumann, S. (2006), p. 8
[33] Cf. Frankel, J.A./Rose, A.K. (1996), p. 8 et seq.
[34] Cf. Balassa, B.(1963)
[35] Cf. Löchel, H./Baumann, S. (2006), p. 9 et seq.
[36] Cf. Löchel, H./Baumann, S. (2006), p. 9
[37] Cf. De Grauwe, P. (2000), p. 23
[38] Cf. De Grauwe, P. (2000), p. 56 et seq.
[39] Cf. Goodhart, C.A.E. (1998), p. 423 et seqq.
[40] Cf. McKinnon, R.I. (1963), p. 722 et seq.
[41] Cf. Kenen, P.B. (1969), p. 49 et seqq.
[42] Cf. Löchel, H. (1998), p. 8
[43] Cf. Vining, D.R., Jr./Elwertowski, T.C. (1976), p. 701
[44] Cf. Hansen, P.S.(1999), p. 1073
[45] Cf. Straubhaar, T./Vöpel, H. (2012), p. 7
[46] Cf. Dhyne, E./Konieczny, J./Rumler, F./Sevestre, P. (2009), p. 29
[47] Cf. De Grauwe, P. (2000), p. 7
[48] Cf. Yamaguchi, S. (2005), p. 5 et seq.
[49] Cf. Herrmann-Pillath, C. (2010)
[50] Cf. Pack, H./Paxson, C. (1999), p. 2 et seq.
[51] Cf. Poncet, S./Bàrthelemy, J. (2008), p. 922
[52] Cf. Mundell, R.A. (1961), p. 663 et seq.
[53] Cf. Feldstein, M./Horioka, C. (1979), p. 2
[54] Cf. Feldstein, M./Horioka, C. (1979), p. 26 et seq.
[55] Cf. Hofmann, B./Remsperger, H.(2005), p. 403
[56] Cf. De Grauwe, P. (2000), p. 32 et seq.
[57] Cf. Alesina, A./Barro, R.J./Tenreyro, S. (2002), p. 7 et seqq.
[58] Cf. Frankel, J.A./Rose, A.K. (1996), p. 3
[59] Cf. Byström, H.N.E./Olofsdotter, K./Söderström, L. (2005), p. 619
[60] Cf. The Central People’s Government of the People’s Republic of China (2012b)