Currency Unions in Prospect and Retrospect
AbstractWe critically review the recent literature on currency unions, and discuss the methodological challenges posed by the empirical assessment of their costs and benefits. In the process, we provide evidence on the economic effects of the euro. In particular, and in contrast with estimates of the trade effect of other currency unions, we find that the impact of the euro on trade has been close to zero. After reviewing the costs and benefits, we conclude with some open questions on normative and positive aspects of the theory of currency unions, emphasizing the need for a unified welfare-based framework to weigh their costs and gains.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0986.
Date of creation: Jun 2010
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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP
Currency union; Integration; Exchange Rage; Trade;
Other versions of this item:
- F00 - International Economics - - General - - - General
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F15 - International Economics - - Trade - - - Economic Integration
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-10 (All new papers)
- NEP-CBA-2010-07-10 (Central Banking)
- NEP-IFN-2010-07-10 (International Finance)
- NEP-INT-2010-07-10 (International Trade)
- NEP-MON-2010-07-10 (Monetary Economics)
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