A Currency Union Between Australia and New Zealand?

Peter J. Lloyd and Lei Lei Song

Economie Internationale, 2006, issue 107, 149-172

Abstract: This paper examines the case for a monetary union, involving a common currency and a common central bank, between Australia and New Zealand. It gives a statistical profile of features of the economies that are relevant to the economic debate. The analysis follows a neo-Mundellian framework that separates the macroeconomic effects from the microeconomic effects. It examines the effects on individual goods, financial and foreign exchange markets, and discusses public choice issues. In the absence of research on the magnitude of the microeconomic gains and on the effects of a monetary union on the Australian economy, we do not advocate a monetary union at the present time.

Keywords: Monetary union; neo-mundellian framework; independent monetary policies; exchange rates; monetary block; monetary integration; monetary policy (search for similar items in EconPapers)
JEL-codes: F15 F36 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepiei:2006-3tg

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