Using a money-augmented production possibilities frontier and trade triangles approach to teach currency union membership

William J. Rieber
Additional contact information
William J. Rieber: N/A

Advances in Economics Education, 2025, vol. 4, issue 1, 19-33

Abstract: This paper adds money to a production possibilities frontier (PPF) and trade triangles framework to enable undergraduate students to analyze the merits of currency union membership. The model developed for this purpose considers a country in the European Union, a country in the Euro area, and a state in the United States. The analysis ranks the three economies in terms of monetary efficiency; the ability of the governments to use monetary, exchange rate, and fiscal policies; labor mobility; access to federal/supranational monetary and fiscal policies; and access to federal/supranational income support programs. The visual nature of the PPF model helps students understand abstract concepts like currency conversion costs and policy trade-offs through concrete representations. This approach supports diverse learning styles and facilitates classroom discussions about the economic and non-economic factors that influence currency union decisions. Furthermore, we contrast our teaching model with the more mathematically sophisticated approaches found in Krugman et al. (2023), demonstrating how the PPF/trade triangle/money model makes similar concepts accessible to students with only a principles-level knowledge of economics.

Keywords: Currency unions; Production possibilities frontier; Trade triangles; Trade theory (search for similar items in EconPapers)
JEL-codes: A22 F00 F10 F45 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/journals/aee/4/1/article-p19.xml (application/pdf)
Restricted Access

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

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:aeejrn:v:4:y:2025:i:1:p19-33

Access Statistics for this article

Advances in Economics Education is currently edited by Peter Docherty

More articles in Advances in Economics Education from Edward Elgar Publishing
Bibliographic data for series maintained by Phillip Thompson ().