A suggested reformulation of the theory of optimal currency areas
AbstractIn contrast to conventional analyses of monetary union between two particular countries or sets of countries, this paper treats the possible expansion of a given currency area as a continuous variable ranging from zero to one; zero if there is no expansion and one if all sources of imports and competition in trade are included in the union. The optimal order in which new members are admitted to the union then becomes a central aspect of the problem. Along with other advantages, this approach makes it easier to defend the argument that many nations are too small for form optimal currency areas. The demands upon the origin of the shocks, factor mobility, and political organization are smaller. Copyright Kluwer Academic Publishers 1995
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Bibliographic InfoArticle provided by Springer in its journal Open Economies Review.
Volume (Year): 6 (1995)
Issue (Month): 3 (July)
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Web page: http://www.springerlink.com/link.asp?id=100323
optimum currency area; exchange rate regime; European Monetary Union; monetary reform;
Other versions of this item:
- Mélitz, Jacques, 1991. "A Suggested Reformulation of the Theory of Optimal Currency Areas," CEPR Discussion Papers 590, C.E.P.R. Discussion Papers.
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F15 - International Economics - - Trade - - - Economic Integration
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
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