Integration durch Währungsunion? Der Fall der Euro-Zone

Peter Spahn

No 57-2012, FZID Discussion Papers from University of Hohenheim, Center for Research on Innovation and Services (FZID)

Abstract: Old OCA theory recommends to unite homogenous countries so that their macroeconomic interrelations do not pose severe stabilisation problems. New OCA theory rightly criticizes the 1960s flavour of the old approach and believes in the endogenous emergence of an OCA if countries use the facilities of an integrated financial market for their catching-up. Whereas in theories of intertemporal optimisation single agents and national economies succeed to go from indebtedness to development, in EMU they were tempted live beyond their intertemporal budget constraint. Professional observers tended to tolerate high current account deficits and loss of competitiveness as temporary phenomena by relying on the Lawson Doctrine. Actually, some EMU countries could avoid insolvency only by monetising their balance of payment deficit.

Keywords: optimal currency union; integration; intertemporal balance of payments; Walters critique; Lawson doctrine (search for similar items in EconPapers)
JEL-codes: E61 E63 E65 F02 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-mac
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