Should Finland and Sweden Form a Monetary Union?
AbstractThis paper surveys the future exchange rate policy of Finland and Sweden using the theory of optimal currency areas as a framework for the analysis. We examine which countries are most suitable to form a currency union with Finland and Sweden. The Finnish and Swedish economies display great similarities regarding industrial structure, business cycle patterns, migration and the design of economic policies. There are substantial differences between on the one hand Finland and Sweden, and on the other, many EU countries which are potential members of a future EMU. Our calculations give support for a Finnish-Swedish currency union and put a Finnish-Swedish membership of the EMU into question. Our results stress the importance of Finnish-Swedish co-operation in monetary matters. This could take many forms, of which a monetary union is one.
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 224.
Length: 30 pages
Date of creation: 26 Feb 1998
Date of revision:
Publication status: Forthcoming in The World Economy, 1999.
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Monetary integration; optimum currency areas; Finland; Sweden.;
Other versions of this item:
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
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