Before undertaking this re-examination, two major considerations should be borne in mind. First, an optimum currency area is a different animal from an economic and monetary union. An optimum currency area comprises a group of countries whose currencies are linked together through fixed exchange rates. Optimum currency areas have consisted of countries at quite different stages of economic development. An economic and monetary union implies not only fixed exchange rates, but also common economic, fiscal and monetary policies as well as a common currency. It is because of these facts that it is so difficult to achieve an economic and monetary union on a strict voluntary basis.
KeywordsExchange Rate Trading Partner Monetary Union Labour Mobility Currency Area
Unable to display preview. Download preview PDF.
- 1.R. A. Mundell, ‘A Theory of Optimum Currency Areas’, American Economic Review, 51 (1961).Google Scholar
- 2.Peter Coffey, ‘European Monetary Integration Re-visited’, Revista de direito e economia, Coimbra, Portugal (June 1975).Google Scholar
- 3.R. I. McKinnon, ‘Optimum Currency Areas’, American Economic Review, 53 (1963).Google Scholar
- 4.P. B. Kenen, ‘The Theory of Optimum Currency Areas’, in R. A. Mundell and A. K. Swoboda, Monetary Problems of the International Economy (Chicago University Press, 1969).Google Scholar
- 5.F. Onida, The Theory and Policy of Optimum Currency Areas and their Implications for the European Monetary Union (Suerf, 1972 );Google Scholar
- G. Magnifico, European Monetary Unification (Macmillan, 1973).Google Scholar
- 6.W. M. Corden, ‘Monetary integration’, Essays in International Finance (Princeton, 1972).Google Scholar
- 7.J. M. Fleming, ‘On Exchange Rate Unification’, Economic Journal (Sept. 1971).Google Scholar
- 8.G. Haberler, A Survey of International Trade Theory (International Finance Section, Princeton, 1961).Google Scholar
- 9.J. R. Presley and C. E. J. Dennis, Currency Areas: Theory and Practice (Macmillan, 1976).Google Scholar