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Checking Out: Exits from Currency Unions

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  • Rose, Andrew K

Abstract

This paper studies the characteristics of departures from monetary unions. During the post-war period, almost seventy distinct countries or territories have left a currency union, while over sixty have remained continuously in currency unions. I compare countries leaving currency unions to those remaining within them, and find that leavers tend to be larger, richer, and more democratic; they also tend to have higher inflation. However, there are typically no sharp macroeconomic movements before, during, or after exits.

Suggested Citation

  • Rose, Andrew K, 2007. "Checking Out: Exits from Currency Unions," CEPR Discussion Papers 6254, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6254
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    References listed on IDEAS

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    1. Alberto Alesina & Robert J. Barro & Silvana Tenreyro, 2003. "Optimal Currency Areas," NBER Chapters,in: NBER Macroeconomics Annual 2002, Volume 17, pages 301-356 National Bureau of Economic Research, Inc.
    2. Michael D. Bordo & Lars Jonung, 1999. "The Future of EMU: What Does the History of Monetary Unions Tell Us?," NBER Working Papers 7365, National Bureau of Economic Research, Inc.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Debito pubblico: quelli che ‘la monetizzazione si fa coi miniassegni…’
      by Alberto Bagnai in Il Fatto Quotidiano on 2014-04-08 11:52:45
    2. Uscita dall’euro: quelli che ‘la benzina andrebbe a 3000 lire’
      by Alberto Bagnai in Il Fatto Quotidiano on 2015-01-06 20:04:31
    3. Nominal devaluation and real wages
      by Alberto Bagnai in Goofynomics on 2015-06-15 14:55:00
    4. Le plan C, ou « Splendeurs et misères de la gauche européenne »
      by Alberto Bagnai in Goofynomics on 2015-11-07 23:07:00
    5. I disallineamenti dell'euro
      by Alberto Bagnai in Goofynomics on 2016-08-04 23:34:00

    Citations

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    Cited by:

    1. Urmee Khan & Maxwell Stinchcombe, 2012. "The Virtues of Hesitation," Working Papers 201425, University of California at Riverside, Department of Economics, revised Sep 2014.
    2. Frank Hefner & Mark David Witte, 2016. "Does Leaving the Eurozone Mean Leaving the Euro?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 22(3), pages 279-294, August.
    3. Antonio Estella, 2013. "Determinants of Spain's decision to leave the European Monetary Union," RSCAS Working Papers 2013/56, European University Institute.
    4. repec:eee:ecmode:v:64:y:2017:i:c:p:524-538 is not listed on IDEAS
    5. Jayjit Roy, 2014. "On the robustness of the trade-inducing effects of trade agreements and currency unions," Empirical Economics, Springer, vol. 47(1), pages 253-304, August.
    6. Antonio Estella, 2013. "Determinants of Spain’s decision to leave the European Monetary Union," EUI-RSCAS Working Papers 56, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    7. De Santis, Roberto A., 2015. "A measure of redenomination risk," Working Paper Series 1785, European Central Bank.
    8. Qureshi, Mahvash Saeed & Tsangarides, Charalambos G., 2012. "Hard or Soft Pegs? Choice of Exchange Rate Regime and Trade in Africa," World Development, Elsevier, vol. 40(4), pages 667-680.
    9. Benjamin Born & Teresa Buchen & Kai Carstensen & Christian Grimme & Michael Kleemann & Klaus Wohlrabe & Timo Wollmershäuser, 2012. "Austritt Griechenlands aus der Europäischen Währungsunion: Historische Erfahrungen, makroökonomische Konsequenzen und organisatorische Umsetzung," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 65(10), pages 09-37, May.
    10. Sibbertsen, Philipp & Wegener, Christoph & Basse, Tobias, 2014. "Testing for a break in the persistence in yield spreads of EMU government bonds," Journal of Banking & Finance, Elsevier, vol. 41(C), pages 109-118.
    11. Frey, Rainer, 2009. "The design of an asymmetric currency union with shock persistence and spillovers: Short-term versus medium-term," European Journal of Political Economy, Elsevier, vol. 25(1), pages 85-97, March.
    12. Yamamoto, Shugo, 2013. "Sudden stop and trade balance reversal after Asian crisis: Investment drought impact versus exchange rate depreciation," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 750-765.

    More about this item

    Keywords

    country; data; empirical; monetary; panel; probit; statistic;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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