What is European economic and monetary union telling us about the properties of optimum currency areas?

Journal of Common Market Studies

Volumn 43, Issue 3, 2005, Pages 607-635

  Mongelli, Francesco Paolo ^a  

^a EUROPEAN CENTRAL BANK   (Germany)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 24944529191     PISSN: 00219886     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.0021-9886.2005.00571.x     Document Type: Article

References (106)

1. Adam, K., Jappelli, T., Menichini, A., Padula, M. and Pagano, M. (2002) 'Analyse, Compare, and Apply Alternative Indicators and Monitoring Methodologies to Measure the Evolution of Capital Market Integration in the European Union'. Report to the European Commission.
2. Adjaute, K. and Danthine, J.-P. (2003) 'European Financial Integration and Equity Returns: A Theory Based Assessment'. In Gaspar, V., Hartmann, P. and Sleijpen, G. (eds) The Transformation of the European Financial System (Frankfurt: European Central Bank).
3. Alesina, A., Barro, R. and Tenreyro, S. (2002) 'Optimal Currency Area'. Harvard University, Harvard Institute of Economic Research Discussion Paper No. 1958.
4. Angeloni, I. and Ehrmann, M. (2003) 'Monetary Transmission in the Euro Area: Early Evidence'. Economic Policy, Vol. 37, pp. 470-92.
5. Angeloni I., Kashyap, A., Mojon, B. and Terlizzese, D. (2001) 'Monetary Transmission in the Euro Area: Where do we Stand?'. ECB Working Paper No. 114.
6. Arreaza, A., Sørensen, B.E. and Yosha, O. (1998) 'Consumption Smoothing through Fiscal Policy in OECD and EU Countries'. National Bureau of Economic Research, NBER Working Paper No. 6372.
7. Artis, M. (2003) 'Reflections on the Optimal Currency Area (OCA) Criteria in the Light of EMU'. International Journal of Economics, No. 8, pp. 297-307.
8. Artis, M. and Buti, M. (2000) 'Close-to-Balance or in Surplus: A Policy-Maker's Guide to the Implementation of the Stability and Growth Pact'. Journal of Common Market Studies, Vol. 38, No. 4, pp. 563-92.
9. Artis, M. and Zhang, W. (1997) 'International Business Cycles and the ERM: Is There a European Business Cycle?.' International Journal of Finance and Economics, Vol. 2, pp. 1-16.
10. Atkeson, A. and Bayoumi, T. (1993), 'Do Private Capital Markets Insure Regional Risks? Evidence from the United States and Europe'. Open Economies Review, No. 4, pp. 303-24.
11. Ayuso, J. and Blanco, R. (1999) 'Has Financial Maket Integration Increased during the Nineties?'. Journal of International Financial Markets, Institutions and Money, Vol. 11, Nos 3-4, pp. 265-87.
12. Baldwin, R., Bertola, G. and Seabright, P. (2003) EMU: Assessing the Impact of the Euro (Oxford: Blackwell). Baldwin, R., Skudelny. F. and Taglioni, D. (2005) 'Trade Effects of the Euro: Evidence from Sectoral Data'. ECB Working Paper Series, No. 446.
13. Barro, R. and Gordon, D. (1983) 'A Positive Theory of Monetary Policy in a Natural Rate Model'. Journal of Political Economy, Vol. 91, pp. 589-610.
14. Bayoumi, T. and Eichengreen, B. (1993) 'Shocking Aspects of European Monetary Integration'. In Torres, F. and Giavazzi, F. (eds) Adjustment and Growth in the European Monetary Union (New York: Cambridge University Press).
15. Bayoumi, T. and Eichengreen, B. (1996) 'Operationalising the Theory of Optimum Currency Areas'. Paper presented at the CEPR's conference on Regional Integration, La Coruna, Spain.
16. Bayoumi, T. and Eichengreen, B. (1997) 'Ever Closer to Heaven? An Optimum-Currency-Area Index for European Countries'. European Economic Review, No. 41, pp. 761-70.
17. Beck, G. and Weber, A. (2001) 'How Wide are European Borders? New Evidence on the Integration Effects of Monetary Unions'. Mimeo, University of Frankfurt.
18. Bentolilla, S. (1997) 'Sticky Labor in Spanish Regions'. European Economic Review, Vol. 41, No. 3-5, pp. 591-98.
19. Berg, J., Grande, M. and Mongelli, F.P. (eds) (2005) Elements of the Euro Area: Integrating Financial Markets (Aldershot: Ashgate).
20. Bertola, G. (2000) 'Labor Markets in the European Union'. Ifo-Studien, Vol. 46, No. 1, pp. 99-122.
21. Bertola, G. and Boeri, T. (2004) 'Product Market Integrations, Institutions and the Labour Markets'. Mimeo.
22. Bini-Smaghi, L. and Vori, S. (1992) 'Rating the EC As an Optimal Currency Area: Is It Worse Than The US?'. Mimeo (Roma: Banca d'Italia).
23. Bini-Smaghi, L. and Wolfers, J. (2000) 'The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence'. Economic Journal, March, pp. C1-33.
24. Blanchard, O. and Giavazzi, F. (2003) 'Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets'. Quarterly Journal of Economics, Vol. 118, No. 3, pp. 879-907.
25. Boeri, T., Börsch-Supan, A. and Tabellini, G. (2001) 'Would you Like to Shrink the Welfare State? The Opinion of European Citizens'. Economic Policy, Vol. 32, pp. 7-44.
26. Braunerhjelm, P., Faini, R., Norman, V., Ruane, F. and Seabright, P. (2000) 'Integration and the Regions of Europe: How the Right Policies can Prevent Polarization'. Monitoring European Integration, No. 10, CEPR.
27. Buiter, W.H. (1999) 'Alice in Euroland'. Journal of Common Market Studies, Vol. 37, No. 2, pp. 181-209.
28. Buti M. and Pench, L. (2004) 'Why do Large Countries Flout the Stability Pact and What can be Done about it?'. Journal of Common Market Studies,Vol. 42, No. 5, pp. 1025-38.
29. Cadiou, L., Guichard, S. and Maurel, M. (2001) 'Labour Market Asymmetries and EM'. Mimeo (Paris: CEPII).
30. Calvo, G. (1978) 'On the Time Consistency of Optimal Policy in a Monetary Economy'. Econometrica, Vol. 46, pp. 1411-28.
31. Canzoneri, M., Vallés, J. and Viñals, J. (1996) 'Do Exchange Rates Move to Address International Macroeconomic Imbalances?'. CEPR Discussion Paper No. 1498, October.
32. Chen, Z. and Knez, P. (1995) 'Measurement of Market Integration and Arbitrage'. Review of Financial Studies, Vol. 8, No. 2, pp. 287-325.
33. Commission of the European Communities (2004) 'EMU after 5 Years'. Report, Brussels.
34. Corden, W.M. (1972) 'Monetary Integration, Essays in International Finance'. International Finance Section No. 93, Princeton University, Department of Economics.
35. De Bandt, O. and Mongelli, F.P. (2002) 'Convergence of Fiscal Policies in the Euro Area'. In Buti, M., Von Hagen, J. and Martinez-Mongay, C. (eds) The Behaviour of Fiscal Authorities: Stabilization, Growth and Institutions (Basingstoke: Palgrave).
36. De Grauwe, P. (2003) Economics of Monetary Union (Oxford: Oxford University Press), 4th edn.
37. De Grauwe, P. and Mongelli, F.P. (2005) 'Endogeneities of Optimum Currency Areas: What brings Countries Sharing a Single Currency Closer together?'. Mimeo.
38. Demertzis, M., Hughes, A. and Rummel, O. (2000) 'Is the European Union a Natural Currency Area, or is it Held Together by Policy Makers?'. Weltwirtschaftliches Archiv, Vol. 136, No. 4, pp. 657-79.
39. Dorrucci, E., Firpo, S., Fratzscher, M. and Mongelli, F.P. (2004) The Link between Institutional and Economic Integration: Insights for Latin America from the European Experience'. Open Economies Review, Vol. 15 pp. 239-60.
40. ECB (1999) 'Inflation Differentials in a Monetary Union'. European Central Bank, Monthly Bulletin, October.
41. ECB (2003) 'Measuring Financial Integration in the Euro Area'. ECB Monthly Bulletin, pp. 53-66.
42. Eichengreen, B. (1990) 'Is Europe an Optimum Currency Area?'. CEPR Discussion Paper No. 478.
43. Eichengreen, B. (1997) European Monetary Unification: Theory, Practice, and Analysis (Cambridge MA: MIT Press).
44. Eichengreen, B. and Leblang, D. (2003) 'Exchange Rate and Cohesion: Historical Perspectives and Political-Economy Considerations'. Journal of Common Market Studies, Vol. 41, No. 5, pp. 797-822.
45. Eichengreen, B. and Wyplosz, C. (1998) The Stability Pact: More than a Minor Nuisance?'. Economic Policy, Vol. 26, pp. 65-113.
46. Emerson, M., Gros, D., Italianer, A., Pisani-Ferry, J. and Reichenbach, H. (1992) One Market, One Money: An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union (Oxford/New York/Toronto/ Melbourne: Oxford University Press, p. 354.
47. Enderlein H. (2004) 'Break it, don't Fix it'. Journal of Common Market Studies, Vol. 42, No. 5 pp. 1039-46.
48. Engel, C. and Rogers, J. (2004) 'European Product Market Integration After the Euro'. Economic Policy, July pp. 347-84.
49. Ferrando, A., Baele, L., Hördahl, P., Krylova, E. and Monnet, C. (2004) 'Measuring Financial Integration in the Euro Area'. ECB Occasional Paper No. 14, April.
50. Fidrmuc, J. (2005) 'The Endogeneity of the Optimum Currency Area Criteria and Intra-industry Trade: Implications for EMU Enlargement'. In De Grauwe, P. and Melitz, J. (eds) Monetary Unions after EMU (Cambridge, MA: MIT Press), forthcoming.
51. Fleming. J.M. (1971) 'On Exchange Rate Unification'. Economic Journal, Vol. 81, pp. 467-88.
52. Forni, M. and Reichlin, L. (1997) 'National Policies and Local Economies: Europe and the United States'. CEPR Discussion Paper, No. 1632.
53. Frankel, J. (1997) The Endogeneity of the Optimum Currency Area Criteria'. Centre for Economic Policy Research, Discussion Paper Series No. 1473.
54. Frankel, J. (1999) 'No Single Currency Regime is Right for All Countries or at All Times'. Essays in International Finance (Princeton, NJ: Princeton University).
55. Frankel, J. and Rose, A. (1997) 'Is EMU more Justifiable Ex Post than Ex Ante?. European Economic Review, Vol. 41, pp. 753-60.
56. Friedman M. (1953) Essays in Positive Economics (Chicago: University of Chicago Press.
57. Funke, M. (2000) 'Macroeconomic Shocks in Euroland versus the UK: Supply, Demand, or Nominal?'. Hamburg University, mimeo.
58. Galati, G. and Tsataronis, K. (2001) The Impact of the Euro on Europe's Financial Markets'. BIS Working Paper No. 100.
59. Gandolfo, G. (1992) 'Monetary Unions'. In Newman, P., Milgate, M. and Eatwell, J. (eds) The New Palgrave Dictionary of Money and Finance 2 (Basingstoke: Palgrave).
60. Gaspar, V. and Mongelli, F.P. (2003) 'Monetary Unification and the Single Market'. In Tumpel-Gugerell, G. and Mooslechner, P. (eds) Economic Convergence and Divergence in Europe: Growth and Regional Development in an Enlarged European Union (Cheltenham: Edward Elgar).
61. Giavazzi F. and Giovannini, A. (1989) Limiting Exchange Rate Flexibility: the European Monetary System Cambridge, MA: MIT Press).
62. Goodhart, C.A.E. (1989) Money, Information and Uncertainty (Cambridge, MA: MIT Press).
63. Gros, D. (2004) 'Profiting from the Euro? Seignorage Gains from Euro Area Accession'. Journal of Common Market Studies, Vol. 42, No. 4, pp. 795-813.
64. Haberler, G. (1970) The International Monetary System: Some Recent Developments and Discussions'. In Halm, G. (ed.) Approaches to Greater Flexibility in Exchange Rates (Princeton, NJ: Princeton University Press).
65. Hasker, J. and Wolf, H. (1999) 'Why Does the "Law of One Price" Fail? A Case Study'. CEPR Discussion Paper No. 2187, July.
66. Helpman, E. (1988) 'Growth, Technological Progress, and Trade'. National Bureau of Economic Research, Reprint No. 1145.
67. Hix, S. (1998) The Political System of the European Union. The European Union Series (Basingstoke: Macmillan).
68. Ingram, J.C. (1962) Regional Payments Mechanisms: The Case of Puerto Rico (Chapel Hill: University of North Carolina Press).
69. Ingram, J.C. (1973) 'The Case for the European Monetary Integration'. Essays in International Finance, No. 98, Princeton University.
70. Ishiyama, I. (1975) 'The Theory of Optimum Currency Areas: A Survey'. Staff Papers, International Monetary Fund, 22, pp. 344-83.
71. Jean, S. and Nicoletti, G. (2004) 'Regulation and Wage Premia'. CEPII Working Paper No. 2004-12.
72. Kalemli-Ozcan, S., Sørensen, B.E. and Yosha, O. (2001) 'Economic Integration, Industrial Specialization, and the Asymmetry of Macroeconomic Fluctuations'. Journal of International Economics, Vol. 55, No. 1, pp. 107-37.
73. Kawai, M. (1987) 'Optimum Currency Areas'. The New Palgrave: A Dictionary of Economics (New York: Stockton Press).
74. Kenen, P.B. (1969) 'The Optimum Currency Area: An Eclectic View'. In Mundell, R. and Swoboda, A. (eds) Monetary Problems of the International Economy (Chicago: University of Chicago Press).
75. Krugman, P. (1993) 'Lessons of Massachusetts for EMU'. In Torres, F. and Giavazzi, F. (eds) Adjustment and Growth in the European Monetary Union, pp. 241-69.
76. Kydland, F. and Prescott, E. (1977) 'Rules Rather than Discretion: The Inconsistency of Optimal Plans'. Journal of Political Economy, Vol. 85, pp. 473-91.
77. McCallum, J. (1989) Monetary Economics: Theory and Policy (New York: Macmillan).
78. McCallum, J. (1995), 'National Borders Matter: Canada- US Regional Trade Patterns'. American Economic Review, Vol. 85, No. 3, pp. 615-23.
79. McKinnon, R. (1963) 'Optimum Currency Areas'. American Economic Review, Vol. 52, pp. 717-25.
80. McKinnon, R. (1993) 'Common Monetary Standard or a Common Currency?'. Rivista di Politica Economica, Vol. 83, pp. 151-9.
81. McKinnon, R. (2004) 'Optimum Currency Areas and Key Currencies: Mundell I versus Mundell II'. Journal of Common Market Studies, Vol. 42, No. 4 pp. 689-715.
82. Masson, P.R. and Taylor, M.P. (1993) Policy Issues in the Operation of Currency Unions (Cambridge: Cambridge University Press).
83. Mélitz, J. (2004) 'Risk Sharing and EMU'. Journal of Common Market Studies, Special Issue, Vol. 42, No. 4, pp. 815-40.
84. Mihaljek, D. and Klau, M. (2004) 'The Balassa-Samuelson Effect in Central Europe: A Disaggregated Analysis'. Comparative Economic Studies, Vol. 46, No. 1, pp. 63-94.
85. Mintz, N.N. (1970) 'Monetary Union and Economic Integration'. Bulletin (New York: New York University).
86. Mongelli, F.P. (2002) ' "New" Views on the Optimum Currency Area Theory: What is EMU telling Us?'. ECB Working Paper No. 138, April.
87. Mundell, R.A. (1961) 'A Theory of Optimum Currency Areas'. American Economic Review, Vol. 51, pp. 657-65.
88. Mundell, R.A. (1973) 'Uncommon Arguments for Common Currencies'. In Johnson, H.G. and Swoboda, A.K. (eds) The Economics of Common Currencies (Allen and Unwin).
89. Nickell, S. and Layard, R. (1998) 'Labour Market Institutions and Economic Performance'. CEP Discussion Paper 407.
90. Obstfeld, M. and Peri, G. (1998) 'Regional Non-Adjustment and Fiscal Policy'. Economic Policy, Vol. 26, pp. 205-60.
91. Obstfeld M. and Rogoff, K. (2000) 'Do We Really Need a New International Monetary Compact?'. NBER, Working Paper Series No. 7864, August.
92. OECD (1999) 'EMU: Facts, Challenges and Policies' (Paris: OECD).
93. Persson, T. and Tabellini, G. (2000) Political Economics: Explaining Economic Policy (Cambridge, MA: MIT Press).
94. Robson, P. (1987) The Economics of International Integration (London, Allen and Unwin).
95. Rose, A. (2000) 'One Money, One Market: Estimating the Effect of Common Currencies on Trade'. Economic Policy, Vol. 30, pp. 9-45.
96. Rose, A. (2004) 'A Meta-Analysis of the Effects of Common Currencies on International Trade'. NBER Working Paper No. 10373.
97. Sachs, J. and Sala-i-Martin, X. (1991) 'Fiscal Federalism and Optimum Currency Areas: Evidence for Europe from the United States'. NBER Working Paper, No. 3855 (Cambridge, MA: National Bureau of Economic Research).
98. Sørensen, P.B. (ed.) (2004) Monetary Union in Europe: Historical Perspectives and Prospects for the Future (Copenhagen: DJØF Publishing).
99. Sørensen, B.E. and Yosha, O. (2000) 'Is Risk Sharing in the United States a Regional Phenomenon?'. Federal Reserve Bank of Kansas City Economic Review, No. 85, pp. 33-47.
100. Swann, D. (2000) The Economics of Europe: From Common Market to European Union (Harmondsworth: Penguin), 9th edn.
101. Tavlas, G.S. (1993) 'The "New" Theory of Optimum Currency Areas'. World Economy, Vol. 16, pp. 663-85.
102. Tavlas, G.S. (1994) 'The Theory of Monetary Integration'. Open Economies Review, Vol. 5, No. 2, pp. 211-30.
103. Tower, E. and Willet, T. (1976) The Theory of Optimum Currency Areas and Exchange Rate Flexibility'. International Finance Section, No. 11, Princeton University.
104. Vanthoor, W.F. V. (1999) A Chronological History of the European Union, 1946-1998 (Cheltenham: Edward Elgar).
105. Viñals, J. and Jimeno, J.F. (1996) 'Monetary Union and European Unemployment'. Banco de Espana, Working Paper, No. 9624.
106. Von Hagen, J. (1991) 'Fiscal Arrangements in a Monetary Union: Evidence from the US'. Indiana University Discussion Paper, No. 58.