Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152572
Authors: 
Mongelli, Francesco Paolo
Year of Publication: 
2002
Series/Report no.: 
ECB Working Paper No. 138
Abstract: 
This paper surveys the optimum currency area (OCA) literature. It is organised into four phases: the 'pioneering phase' which put forward the OCA theory and its properties, the 'reconciliation phase' when its diverse facets were combined, the 'reassessment phase' that led to the 'new OCA theory' and the 'empirical phase' during which the theory was subject to due empirical scrutiny. We make systematic reference to the European economic and monetary union (EMU) to which the OCA theory has been most frequently applied. All pioneering contributions are still relevant. Several early weaknesses have now been amended. Meanwhile, the balance of judgements has shifted in favour of currency unions. They are now deemed to generate fewer costs in terms of the loss of autonomy of domestic macroeconomic policies, and there is greater emphasis on the benefits. Looking ahead we are confronted with two distinct paradigms -- specialisation versus endogeneity of OCA.
Subjects: 
and EMU
Economic and Monetary Integration
International Monetary Arrangements
Optimum Currency Area
JEL: 
E42
F15
F33
F41
Document Type: 
Working Paper

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