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Conditions for an Optimality of an Optimum Currency Area


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  • Demopoulos, G.D.
  • Yannacopoulos, N.A.
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    Two approaches to the theory of OCA are distinguished in this paper. The first attempts to define the OCA from the point of view of a single country, and the second examines the optimality of a currency area of a given size anf membership. The present paper after reviewing the drawbacks of the marginalistic approach which looks at the determination of a currency area from the point of view of a single country, deals with the second approach, and argues that a currency area is optimal when the welfare functions of its constituent members are in the core.

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    Bibliographic Info

    Paper provided by Athens University of Economics and Business in its series DEOS Working Papers with number 91.

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    Length: 12 pages
    Date of creation: 1998
    Date of revision:
    Handle: RePEc:aue:wpaper:91

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