IDEAS home Printed from https://ideas.repec.org/a/eko/ekoeko/3_41.html
   My bibliography  Save this article

The premises and assumptions of monetary integration in Europe against the background of the theory of optimum currency area

Author

Listed:
  • Tomasz Łyziak

Abstract

The creation of the Economic and Monetary Union on the 1st January 1999 and the introduction of the common currency euro enlivened the discussion on the subject of the theory of optimum currency area and their practical applications. The opinions appeared that the countries of the euro zone do not fulfill the criteria of optimum currency area, and therefore the conducting of a uniform money policy and an irrevocably stiffening of the currency rates inside this area may considerably hinder the efficient functioning of the particular economies, especially in a situation of asymmetrical disturbances. This article presents against the background of the theories of international economic relations a historical outline of the process of economic integration in Europe. Moreover there are discussed criteria serving to evaluate the optimality of the currency area and also there are compiled the results of empirical research concerning the degree of fulfilling of these criteria by the Euroland countries. The conclusion of the article is the statement that within the euro zone there are economies to a different degree predestined to stiffen the rates of their currencies with respect to the euro and to resign from soverainty in the scope of money policy. The requirements of the optimum currency area are fulfilled to the largest degree by Germany, Austria and Belgium, to the least degree by Finland and Portugal, whereas the remaining countries of the Economic and Monetary Union are situated on intermediate position.

Suggested Citation

  • Tomasz Łyziak, 2001. "The premises and assumptions of monetary integration in Europe against the background of the theory of optimum currency area," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 3.
  • Handle: RePEc:eko:ekoeko:3_41
    as

    Download full text from publisher

    File URL: http://ekonomia.wne.uw.edu.pl/ekonomia/getFile/413
    Download Restriction: no

    References listed on IDEAS

    as
    1. Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-1025, July.
    2. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, January.
    3. Angeloni, Ignazio & Dedola, Luca, 1999. "From the ERM to the euro: new evidence on economic and policy convergence among EU countries," Working Paper Series 0004, European Central Bank.
    4. Jeffrey A. Frankel, 1999. "No Single Currency Regime is Right for All Countries or At All Times," NBER Working Papers 7338, National Bureau of Economic Research, Inc.
    5. Bennett T. McCallum, 1999. "Theoretical Issues Pertaining to Monetary Unions," NBER Working Papers 7393, National Bureau of Economic Research, Inc.
    6. Stephen G. Cecchetti, 1999. "Legal structure, financial structure, and the monetary policy transmission mechanism," Economic Policy Review, Federal Reserve Bank of New York, issue Jul, pages 9-28.
    7. Alesina, Alberto & Wacziarg, Romain, 1999. "Is Europe going too far?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 51(1), pages 1-42, December.
    8. Frederic S. Mishkin, 1995. "Symposium on the Monetary Transmission Mechanism," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 3-10, Fall.
    9. Lafrance, Robert & St-Amant, Pierre, 1999. "Optimal Currency Areas: A Review of the Recent Literature," Staff Working Papers 99-16, Bank of Canada.
    10. Smaghi, L.B. & Area, C., 1993. "Rating the EC as an Optimal Currency Area," Papers 187, Banca Italia - Servizio di Studi.
    11. Glenn Hoggarth, 1996. "Introduction to Monetary Policy," Handbooks, Centre for Central Banking Studies, Bank of England, number 1, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eko:ekoeko:3_41. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marta Höffner). General contact details of provider: http://edirc.repec.org/data/fesuwpl.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.