Is Europe an Optimum Currency Area?
An optimum currency area is an economic unit composed of regions affected symmetrically by disturbances and between which labor and other factors of production flow freely. The symmetrical nature of disturbances and the high degree of factor mobility make it optimal to forsake nominal exchange rate changes as an instrument of adjustment and to reap the reduction in transactions costs associated with a common currency. This paper assesses labor mobility and the incidence of shocks in Europe by comparing them with comparable measures for Canada and the United States. Real exchange rates, a standard measure of the extent of assymetrical disturbances, remain considerably more variable in Europe than within the united states. Real securities prices, a measure of the incentive to reallocate productive capital across regions, appear considerably more variable between Paris and Dusseldorf than between Toronto and Montreal. A variety of measures suggests that labor mobility and the speed of labor market adjustment remain lower in Europe than in the United states. Thus, Europe remains further than the currency unions of North America from the ideal of an optimum currency area.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||01 Oct 1990|
|Date of revision:|
|Contact details of provider:|| Postal: University of California at Berkeley, Berkeley, CA USA|
Web page: http://www.haas.berkeley.edu/groups/iber/wps/econwp.html
More information through EDIRC
|Order Information:|| Postal: IBER, F502 Haas Building, University of California, Berkeley CA 94720-1922|
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.:
- Barry Eichengreen., 1990.
"One Money for Europe? Lessons from the US Currency Union,"
Economics Working Papers
90-132, University of California at Berkeley.
- Eichengreen, Barry, 1990. "One Money for Europe? Lessons from the US Currency Union," Department of Economics, Working Paper Series qt6ks1k831, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Jeremy A.Rogoff Bulow & Kenneth, 1986.
"A Constant Recontracting Model of Sovereign Debt,"
University of Chicago - George G. Stigler Center for Study of Economy and State
43, Chicago - Center for Study of Economy and State.
- Jeremy I. Bulow & Kenneth Rogoff, 1986. "A Constant Recontracting Model of Sovereign Debt," NBER Working Papers 2088, National Bureau of Economic Research, Inc.
- Bulow, Jeremy & Rogoff, Kenneth S., 1989. "A Constant Recontracting Model of Sovereign Debt," Scholarly Articles 12491028, Harvard University Department of Economics.
- Eichengreen, Barry, 1989.
"The Comparative Performance of Fixed and Flexible Exchange Rate Regimes: Interwar Evidence,"
CEPR Discussion Papers
349, C.E.P.R. Discussion Papers.
- Barry Eichengreen., 1989. "The Comparative Performance of Fixed and Flexible Exchange Rate Regimes: Interwar Evidence," Economics Working Papers 89-119, University of California at Berkeley.
- Barry Eichengreen, 1989. "The Comparative Performance of Fixed and Flexible Exchange Rate Regimes : Interwar Evidence," NBER Working Papers 3097, National Bureau of Economic Research, Inc.
- Sebastian Edwards, 1989. "Real Exchange Rates in the Developing Countries: Concepts and Measure- ment," NBER Working Papers 2950, National Bureau of Economic Research, Inc.
- Eleanor H. Erdevig, 1986. "Federal funds flow no bargain for Midwest," Economic Perspectives, Federal Reserve Bank of Chicago, issue Jan, pages 3-10.
- Boltho, Andrea, 1989. "European and United States Regional Differentials: A Note," Oxford Review of Economic Policy, Oxford University Press, vol. 5(2), pages 105-15, Summer.
When requesting a correction, please mention this item's handle: RePEc:ucb:calbwp:90-151. 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: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.