Endogeneities of optimum currency areas: what brings countries sharing a single currency closer together?

Francesco Mongelli and Paul De Grauwe

No 468, Working Paper Series from European Central Bank

Abstract: This paper brings together several strands of the literature on the endogenous effects of monetary integration: i.e., whether sharing a single currency may set in motion forces bringing countries closer together. The start of EMU has spurred a new interest in this debate. Four areas are analysed: the endogeneity of economic integration, in which we look primarily at evidence on prices and trade; the endogeneity of financial integration or equivalently of insurance schemes based on capital markets; the endogeneity of symmetry of shocks; and the endogeneity of product and labour market flexibility. We present diverse arguments and, where possible, explore the incipient empirical literature focussing on the euro area. Our preliminary conclusion is one of moderate optimism. The different endogeneities that exist in the dynamics towards optimum currency areas are at work. How strong these endogeneities are and how quickly they will do their work remains to be seen. JEL Classification: E42, F13, F33, F42

Keywords: Economic and Monetary Integration and EMU; Optimum Currency Area (search for similar items in EconPapers)
Date: 2005-04
Note: 1423663
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (169)

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp468.pdf (application/pdf)

Related works:
Working Paper: Endogeneities of Optimum Currency Areas: What brings Countries Sharing a Single Currency Closer together? (2005)
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:ecb:ecbwps:2005468

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().