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Reflections on the optimal currency area (OCA) criteria in the light of EMU

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  • M.J. Artis

    (European University Institute (EUI), Italy and CEPR)

Abstract

Optimal Currency Area (OCA) theory offers criteria for evaluating the optimality of monetary union arrangements. This paper reviews the use that has been made of these criteria in the specific context of European Monetary Union. It reviews the use of business cycle synchronization data and the data produced by SVAR analyses, which led to the 'core-periphery' distinction. It also reviews extensions of the criteria that have been proposed or generated in this context: in particular, the proposition that the criteria may be 'endogenous'. It presents Taylor rule estimates to check for inhomogeneities in Euro Area performance. The paper concludes that OCA criteria provide a useful starting point for evaluating monetary union options. Copyright © 2003 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal International Journal of Finance & Economics.

Volume (Year): 8 (2003)
Issue (Month): 4 ()
Pages: 297-307

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Handle: RePEc:ijf:ijfiec:v:8:y:2003:i:4:p:297-307

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References

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Cited by:
  1. Spahn, Peter, 2012. "Integration durch Währungsunion? Der Fall der Euro-Zone," FZID Discussion Papers 57-2012, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  2. Lars Jonung, 2004. "To be or not to be in the euro? Benefits and costs of monetary unification as perceived by voters in the Swedish euro referendum 2003," European Economy - Economic Papers 205, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  3. Melisso Boschi & Alessandro Girardi, 2008. "The contribution of domestic, regional, and international factors to Latin America’s business cycle," ISAE Working Papers 105, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
  4. Sofia Gouveia & Leonida Correia, 2008. "Business cycle synchronisation in the Euro area: the case of small countries," International Economics and Economic Policy, Springer, vol. 5(1), pages 103-121, July.
  5. Guglielmo Maria Caporale & Davide Ciferri & Alessandro Girardi, 2011. "Are The Baltic Countries Ready To Adopt The Euro? A Generalized Purchasing Power Parity Approach," Manchester School, University of Manchester, vol. 79(3), pages 429-454, 06.
  6. Jean-Sébastien Pentecôte & Maryline Huchet-Bourdon, 2009. "Shock asymmetries and distance to the Euro Area," Post-Print hal-00730072, HAL.
  7. Jorge Pérez-Rodríguez, 2006. "The Euro and Other Major Currencies Floating Against the U.S. Dollar," Atlantic Economic Journal, International Atlantic Economic Society, vol. 34(4), pages 367-384, December.
  8. Foresti, Pasquale, 2007. "Is Latin America an Optimal Currency Area? Evidence from a Structural Vector Auto-regression analysis," MPRA Paper 2961, University Library of Munich, Germany, revised Apr 2008.
  9. Lars Jonung, 2004. "The Political Economy of Monetary Unification: The Swedish Euro Referendum of 2003," Cato Journal, Cato Journal, Cato Institute, vol. 24(1-2), pages 123-149, Spring/Su.
  10. Hall, S.G. & Yhap, B., 2008. "Measuring the Correlation of Shocks Between the UK and the Core of Europe," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(1), pages 17-26, March.
  11. Heinz Handler, 2013. "The Eurozone: Piecemeal Approach to an Optimum Currency Area," WIFO Working Papers 446, WIFO.

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