A suggested reformulation of the theory of optimal currency areas
In 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
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul DE GRAUWE & Hilde Heens, 1993. "Real Exchange Rate Variability in Monetary Unions," Discussion Papers (REL - Recherches Economiques de Louvain) 1993015, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Xavier Sala-i-Martin & Jeffrey Sachs, 1991.
"Fiscal Federalism and Optimum Currency Areas: Evidence for Europe From the United States,"
NBER Working Papers
3855, National Bureau of Economic Research, Inc.
- Sachs, Jeffrey & Sala-i-Martin, Xavier, 1992. "Fiscal Federalism and Optimum Currency Areas: Evidence for Europe from the United States," CEPR Discussion Papers 632, C.E.P.R. Discussion Papers.
- Robert E. Hall, 1970. "Why Is the Unemployment Rate So High at Full Employment?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 1(3), pages 369-410.
- Vaubel, Roland, 1978. "Real exchange-rate changes in the European community : A new approach to the determination of optimum currency areas," Journal of International Economics, Elsevier, vol. 8(2), pages 319-339, May.
- Bayoumi, Tamim & Masson, Paul R, 1994.
"Fiscal Flows in the United States and Canada: Lessons for Monetary Union in Europe,"
CEPR Discussion Papers
1057, C.E.P.R. Discussion Papers.
- Bayoumi, Tamim & Masson, Paul R., 1995. "Fiscal flows in the United States and Canada: Lessons for monetary union in Europe," European Economic Review, Elsevier, vol. 39(2), pages 253-274, February.
- Eichengreen, Barry, 1990.
"Is Europe an Optimum Currency Area?,"
CEPR Discussion Papers
478, C.E.P.R. Discussion Papers.
- Eichengreen, Barry, 1990. "Is Europe an Optimum Currency Area?," Department of Economics, Working Paper Series qt40m5g6pp, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Barry Eichengreen, 1991. "Is Europe an Optimum Currency Area?," NBER Working Papers 3579, National Bureau of Economic Research, Inc.
- Barry Eichengreen., 1990. "Is Europe an Optimum Currency Area?," Economics Working Papers 90-151, University of California at Berkeley.
- Thomas Willett & Edward Tower, 1970. "Currency areas and exchange-rate flexibility," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 105(1), pages 48-65, September.
- Robinson, W & Webb, T R & Townsend, M A, 1979. "The Influence of Exchange Rate Changes on Prices: A Study of 18 Industrial Countries," Economica, London School of Economics and Political Science, vol. 46(181), pages 27-50, February.
- Hochreiter, Eduard & Winckler, Georg, 1995.
"The advantages of tying Austria's hands: The success of the hard currency strategy,"
European Journal of Political Economy,
Elsevier, vol. 11(1), pages 83-111, March.
- Eduard HOCHREITER & Georg WINCKLER, 1993. "The Advantages of Tying Austria's Hands: The Success of the Hard Currency Strategy," Vienna Economics Papers vie9307, University of Vienna, Department of Economics.
- Paul R. Masson & Mark P. Taylor, 1993. "Fiscal Policy within Common Currency Areas," Journal of Common Market Studies, Wiley Blackwell, vol. 31(1), pages 29-44, 03.
- Fleming, J Marcus, 1971. "On Exchange Rate Unification," Economic Journal, Royal Economic Society, vol. 81(323), pages 467-88, September.
When requesting a correction, please mention this item's handle: RePEc:kap:openec:v:6:y:1995:i:3:p:281-298. 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: (Guenther Eichhorn)or (Christopher F. Baum)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.