Optimum Currency Areas and European Monetary Unification

Selahattin Dibooglu and Julius Horvath ()

Contemporary Economic Policy, 1997, vol. 15, issue 1, pages 37-49

Abstract: This paper examines the European experience from optimum currency areas perspective with a focus on the correlation of underlying aggregate shocks within a structural vector autoregression (VAR) framework. Appropriately identifying supply shocks, real fiscal shocks, and nominal shocks, the paper investigates the correlations of shocks and tries to evaluate the likely adjustment and other problems that may take place with the introduction of a single currency in Europe. Using data for 20 European market economies, the paper compares original members of the European Community to new members and non-members. Shocks are mostly country-specific, particularly for newer members and non-members, suggesting the importance of alternative adjustment mechanisms other than national monetary policies after the introduction of a single currency. Copyright 1997 by Oxford University Press.

View citations in EconPapers

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This journal article can be ordered from
http://www.oup.co.uk/journals

Access Statistics for this article

Contemporary Economic Policy is edited by Wade E. Martin

More articles in Contemporary Economic Policy from Oxford University Press
Address: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Series data maintained by Christopher F. Baum ().