On optimality or non-optimality of the eurozone
Economic and Monetary Union is an unprecedented event in the monetary history of Europe. The eurozone since its creation 13 years ago expanded to 17 Member States and functioned relatively smoothly up to the outset of the global financial crisis. Only the severity of the subsequent eurozone crisis showed the actual scale of structural, institutional and governance problems it had. The differences between its core and peripheral regions became more than evident. In the present paper we discuss the optimality of the existing and the enlarged eurozone. Despite of the progress made, eurozone is far away from meeting the OCA criteria. Further enlargements, by increasing the overall internal diversity of the union, are likely to increase the gap. It seems however that even non-optimal monetary unions may function but at a significantly higher costs. In some cases the long term costs could even outweigh the benefits. The nominal convergence criteria are only partially consistent with the OCA theory, they are largely arbitrary and should be modified in the interest of the present eurozone as well as of acceding states.
|Date of creation:||Feb 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Univeristy of Gdansk, Faculty of Economics, ul. Armii Krajowej 119/121, 81-824 Sopot, Poland|
Phone: (048) 58 523-13-70
Fax: (048) 58 523-13-70
Web page: http://ekonom.ug.edu.pl/web/keie/index.html?lang=pl
More information through EDIRC
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.:
- Alberto Alesina & Robert J. Barro & Silvana Tenreyro, 2003.
"Optimal Currency Areas,"
in: NBER Macroeconomics Annual 2002, Volume 17, pages 301-356
National Bureau of Economic Research, Inc.
- Alberto Alesina & Robert Barro & Silvana Tenreyro, 2002. "Optimal Currency Areas," Harvard Institute of Economic Research Working Papers 1958, Harvard - Institute of Economic Research.
- Alberto Alesina & Robert J. Barro & Silvana Tenreyro, 2002. "Optimal Currency Areas," NBER Working Papers 9072, National Bureau of Economic Research, Inc.
- Tenreyro, Silvana & Barro, Robert & Alesina, Alberto, 2002. "Optimal Currency Areas," Scholarly Articles 4553033, Harvard University Department of Economics.
- Michael D. Bordo, 2003.
"Exchange Rate Regime Choice in Historical Perspective,"
IMF Working Papers
03/160, International Monetary Fund.
- Michael D. Bordo, 2003. "Exchange Rate Regime Choice in Historical Perspective," NBER Working Papers 9654, National Bureau of Economic Research, Inc.
- 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.
- Hugh Rockoff, 1999.
"How Long Did It Take the United States to Become an Optimal Currency Area?,"
Departmental Working Papers
199910, Rutgers University, Department of Economics.
- Hugh Rockoff, 2000. "How Long Did It Take the United States to Become an Optimal Currency Area?," NBER Historical Working Papers 0124, National Bureau of Economic Research, Inc.
- Ricci, Luca Antonio, 2007.
"A Model of an Optimum Currency Area,"
Economics Discussion Papers
2007-45, Kiel Institute for the World Economy (IfW).
- Ricci, Luca Antonio, 2008. "A Model of an Optimum Currency Area," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 2, pages 1-31.
- Bayoumi, Tamim & Eichengreen, Barry, 1994.
"Monetary and exchange rate arrangements for NAFTA,"
Journal of Development Economics,
Elsevier, vol. 43(1), pages 125-165, February.
- Bordo, Michael D. & Jonung, Lars, 2000. "A Return to the Convertibility Principle? Monetary And Fiscal Regimes in Historical Perspective," SSE/EFI Working Paper Series in Economics and Finance 415, Stockholm School of Economics.
- George Tavlas, 1994. "The theory of monetary integration," Open Economies Review, Springer, vol. 5(2), pages 211-230, March.
- Ignazio Angeloni & André Sapir, 2011. "The international monetary system is changing: what opportunities and risks for the euro?," Working Papers 632, Bruegel.
When requesting a correction, please mention this item's handle: RePEc:gda:wpaper:1201. 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: (Tomasz Brodzicki)
If references are entirely missing, you can add them using this form.