| As one of the most important research fields of international finance, since its establishment in 1961 by Robert A. Mundell, the Optimum Currency Area(OCA) Theory has drawn great attention from the economists. And it has been improved and perfected along with the development of economics and practical applications of itself. As the global economy integration develops and the regional currency cooperations moves on, attention upon the Optimum Currency Area(OCA) Theory has been brought up to an unprecedented level.The euro witnesses its 10th anniversary this year. As the most developed regional currency uion in the world, the Euro Area becomes the best subject of empirical research of the Optimum Currency Area Theory. Therefore, analyzing the precious experience of the establishment, operation and development of the Euro Area is of upmost importance to other regional currency cooperations in the world.This paper first introduces the different development phases of the the Optimum Currency Area Theory. Then, the GG-LL Model used to analyze the comprehensive cost and benefit of a common currency, which was first generalized and proposed by Krugman and Obstfeld, is introduced. Combined by the various criteria, an empirical research on the euro-12, euro-16 and the candidates is conducted. Based on the empirical research, a conclusion is reached: the euro-12 roughly meets the criteria of the Optimum Currency Area, while the euro-16 falls far behind. The inclusion of candidate countries from central and eastern Europe now would make the Euro Area deviate from its path towards the Optimum Currency Area further. In the last chapter, by generalizing precious experience from the Euro Area, a discussion about the feasibility of the East Asia currency cooperation is conducted. |
