Feasibility Study On The Optimal Currency Area Of The “Belt And Road” From The Perspective Of Economic Shock Symmetry

Regional monetary cooperation is an important field of current academic research and discussion,"the Belt and Road" initiative as an important initiative in today's world obtaining a positive response and concerns,its regional monetary cooperation issue has occupied an important position and much attention in the world economic structure,with the rapid deepening of its regional economic integration.Domestic and foreign scholars on this issue is usually by means of the optimal currency area theory,to study which countries can build an "optimal" currency area,in this area,a fixed exchange rate between the countries inside the area are settled,or circulating a single currency,the area implements a unified policy,thereby all countries reach an equilibrium simultaneously.Then,do the countries alongside " the Belt and Road " have the feasibility of constructing an optimal currency area? What position does China occupies in the construction of " the Belt and Road " optimal currency area?These two issues are worth exploring.This paper will study it based on a perspective of the symmetry economic shock.This paper reviews the development of the optimal currency area theory,thinks symmetry economic shocks theory as a modern branch of OCA theory is superior in the study of the feasibility of constructing optimal currency area,then it elaborates the research system of symmetry economic shocks theory and its successful application in the euro area.The theory thinks that,countries in the region suffered the faster adjustment to economic shocks or the most symmetry economic shocks,will pay the less while launch a monetary cooperation by constructing optimal currency area,then there will be a greater feasibility of constructing optimal currency area.Therefore,this paper based on the perspective of symmetry economic shocks,establish a panel vector autoregression model(PVAR)to recognize the aggregate supply shocks and aggregate demand shocks,checking the symmetry characteristic of economic shocks between the countries along " the Belt and Road ",to study the feasibility of " the Belt and Road " optimal currency area.The results showed that " the Belt and Road " now does not have the feasibility of constructing an optimal currency area throughout the region,but its Southeast Asia,Middle Asia and Central & Eastern Europe region have already shown some feasibility,China can consider building a secondary currency area in Southeast Asia and Middle Asia region of " the Belt and Road ".