Currencies and the Allocation of Risk: The Welfare Effects of a Monetary Union

Pablo Neumeyer

American Economic Review, 1998, vol. 88, issue 1, 246-59

Abstract: In a general equilibrium model with incomplete asset markets, nominal securities, and mean-variance preferences, a monetary union is desirable when the gain from eliminating excess volatility of nominal variables exceeds the cost of reducing the number of currencies with which to hedge risks. Copyright 1998 by American Economic Association.

Date: 1998
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Working Paper: Currencies and the Allocation of Risk: The Welfare Effect of a Monetary Union (1995)
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