Regional Currency and Regional Trade Integration
Department of Land Economy, University of Cambridge, UK
- *Corresponding Author:
- Huidong He
Department of Land Economy
University of Cambridge
19 Silver Street Cambridge
Cambridgeshire CB3 9EU, UK
E-mail: [email protected]
Received Date: Mar 20, 2017; Accepted Date: April 14, 2017; Published Date: April 20, 2017
Citation: Huidong He (2017) Regional Currency and Regional Trade Integration. J Glob Econ 5: 245. doi:10.4172/2375-4389.1000245
Copyright: © 2017 Huidong H. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
This paper put forward the concept of most frequently used regional currency and discovers there is a U-shape between regional trade integration and it. We choose sixteen in this paper which including all types of regional economic cooperation organisations at the national level. When the proportion of most frequently used regional currency is low, the use of this currency impedes the regional trade. But it promotes the regional trade when it passes the bottom of the U-shape. The transaction cost of the currency contributes a lot to explain this U-shape. Currency status and the political game also act as a significant role. While the proportion of the most frequently used regional currency is relatively low, using this currency is detrimental to the regional trade of the global countries.