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This paper asseses the prospects for monetary integration between EmergingEast Asian (EA) economies. We develop a simple analytical framework forcurrency unions of small open economies. The empirical analysis looks at anumber of supply-side characteristics of EEA countries highlighted by the model,distinguishing betwen aggregate and tradable sector structural features.Moreover, we discuss the evidence on the cross-country correlation ofdisturbances hitting the region. Our study indicates that, at present, EEAeconomies exhibit a high degree of cross-country supply diversity, while there isno compelling evidence that shocks are highly correlated across the region.JEL classification: E52, E58, F33, F40