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A Theory of Optimum Currency Areas; Revisited


  • Robert P Flood
  • Joshua Aizenman


Starting with Friedman and Mundell the academic literature has conducted a high level debate concerning the design of cross-country monetary arrangements. That debate has become very complex and the data requirements necessary for appropriate application of the principles developed are far beyond the means of the very nations for which the principles might be valuable. In this paper we return to the simplicity of the early arguments and formalize them in a way that may be helpful for currency area decisions where little is known about economic structure.

Suggested Citation

  • Robert P Flood & Joshua Aizenman, 1992. "A Theory of Optimum Currency Areas; Revisited," IMF Working Papers 92/39, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:92/39

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    References listed on IDEAS

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    Cited by:

    1. Roland Craigwell & Kevin Greenidge & Harold Codrington & Rupert D Worrell, 2003. "Economic Resilience with An Exchange Rate Peg; The Barbados Experience, 1985-2000," IMF Working Papers 03/168, International Monetary Fund.
    2. Atish R. Ghosh & Holger C. Wolf, 1994. "How Many Monies? A Genetic Approach to Finding Optimum Currency Areas," NBER Working Papers 4805, National Bureau of Economic Research, Inc.
    3. Julius Horvath, 2004. "Optimum currency area theory: A selective review," Macroeconomics 0401014, EconWPA.
    4. Lafrance, Robert & St-Amant, Pierre, 2000. "Les zones monétaires optimales," L'Actualité Economique, Société Canadienne de Science Economique, vol. 76(4), pages 577-612, décembre.


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