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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/17968| Title: | A Model of an Optimum Currency Area |
| Keywords: | E52 E42 H77 F36 F33 F31 J61 F02 F4 E61 ddc:330 Optimum currency areas cost-benefit analysis exchange rate regimes currency union monetary integration |
| Issue Date: | 16-Oct-2013 |
| Publisher: | Kiel Institute for the World Economy (IfW) Kiel |
| Description: | This paper develops a model of the circumstances under which it is beneficial to participate in a currency area. The proposed two-country monetary model of trade with nominal rigidities encompasses the real and monetary arguments suggested by the optimum currency area literature: correlation of real and monetary shocks, international factor mobility, fiscal adjustment, openness, difference in national inflationary biases, and transactions costs. The effect of openness on the net benefits is ambiguous, contrary to the usual argument that more open economies are better candidates for a currency area. Also, prospective member countries do not necessarily agree on whether a given currency union should be created. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/17968 |
| Other Identifiers: | http://hdl.handle.net/10419/17968 ppn:558411312 RePEc:zbw:ifwedp:6172 |
| Appears in Collections: | EconStor |
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