Quo Vadis regional monetary integration? Major trends in the optimum currency area literature over the last 60 years: A bibliometric approach

This study presents a quantitative survey of one of the main theories of regional monetary union: the optimum currency area (OCA) theory. We use a bibliometric approach, with a focus on recent trends in the literature, in the aftermath of the financial crisis starting in 2007. We highlight five major trends in the OCA literature by constructing a database comprising 997 articles for the period 1961-2018. First, although the common view is that the OCA theory originated in the 1960s, we show that it has significantly developed only fairly recently, since the 1990s. We point out that during the 1990s and early 2000s the OCA theory became widely disseminated across a large range of publication types. Secondly, this literature is stimulated by events, mainly occurring in the European region. The recent financial crises, notably the European sovereign debt crisis, are no exception to this rule, boosting the number of articles on OCA. Thirdly, as a consequence, most of these articles are about Europe. Fourth, the evolving dynamics of OCA literature is currently towards more articles being oriented towards macroeconomics and econometrics, contrary to its international economics orientation at the origin. Finally, we identify a recurrent debate between the two paradigms of OCA theory: “divergence” versus “endogeneity” of regional monetary integration. We find that the recent financial crisis was followed by a revival and development of this debate: the “divergence” view à la Krugman of regional monetary integration is becoming more and more accepted. We conclude by drawing lessons in terms of policymaking from our findings.