Monetary Policy Coordination In The Regional Economy

With the development of regionalization and globalization, countries are getting increasingly connected. More and more countries realize the necessity of effective monetary policy cooperation to ensure the stable development of regional economies.This dissertation firstly introduces the game theory and theories about international monetary cooperation. Then the history of European monetary integration and banking system are briefly discussed. Finally, relevant models and methods of game theory are applied to analyzing the formulation and execution of European monetary policy.Eurodollar not only helps Euro-region countries optimize the allocation and utilization of resources but also favors the stabilization of international monetary system. By policies and regulations, structural funds and regional policies, etc., the European Union coordinates the contradiction between the unified monetary policy made by the Monetary Union and the fiscal policies of each member country, and harmonizes their benefits as well. Many places, especially East Asia, follow the lead of the success of European integration. After the 1997-1998 financial crises, East Asian countries are aware of the importance of economic cooperation, especially in monetary field.Later, the dissertation illustrates the long-term potential of the collaboration between China and other East Asian countries, and the regional coordination within Chinese territory as well. The article also tries to put forward some policy related suggestions.The trend of collaboration among East Asian countries can't be reversed due to their mutual benefits arising from regionalization and globalization. As China plays an important role in the regional economic development of East Asia, cooperation with East Asian countries not only contributes to the stable development of regional economy, but also benefits China's own development.For the obvious regional economic disparity among central, eastern and western China, financial system reform should be accelerated for harmonious development in varies areas; discretionary policies should be applied based on regional imbalance consideration; policy transmission mechanism should be improved; besides, cooperative fiscal policies should be set up, and the decrease of regional differences would help to achieve a general prosperity.