Abstract
This article reviews currency unions, that is, groups of countries that use a common money. There are a large number of such monetary unions in both the industrial and the developing worlds. I review both the theoretical reasons why countries choose to belong to currency unions and the empirical performance of these unions.
I thank Steven Durlauf for helpful comments.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsBibliography
Alesina, A., and R. Barro. 2002. Currency unions. Quarterly Journal of Economics 117: 409–436.
Alesina, A., R. Barro, and S. Tenreyro. 2002. Optimal currency areas. In NBER macroeconomics annual 2002, ed. M. Gertler and K. Rogoff. Cambridge, MA: MIT Press.
Bayoumi, T., and B. Eichengreen. 1992. Shocking aspects of European monetary unification. In The transition to economic and monetary union in Europe, ed. F. Torres and F. Giavazzi. New York: Cambridge University Press.
Bayoumi, T., and B. Eichengreen. 1998. Exchange rate volatility and intervention: Implications of the theory of optimum currency areas. Journal of International Economics 45: 191–209.
Edwards, S., and I. Magendzo. 2003. A currency of one’s own? An empirical investigation on dollarization and independent currency unions. Working Paper No. 9514. Cambridge, MA: NBER.
Engel, C., and A. Rose. 2002. Currency unions and international integration. Journal of Money Credit and Banking 34: 1067–1089.
Frankel, J., and A. Rose. 1998. The endogeneity of the optimum currency area criteria. Economic Journal 108: 1009–1025.
HM Treasury. 2003. UK membership of the single currency: EMU studies. Online. http://www.hm-treasury.gov.uk/documents/international_issues/the_euro/assessment/studies/euro_assess03_studindex.cfm. Accessed 25 Mar 2006.
Kenen, P. 1969. The theory of optimum currency areas: An eclectic view. In Monetary problems of the international economy, ed. R. Mundell and A. Swoboda. Chicago: University of Chicago Press.
McKinnon, R. 1963. Optimum currency areas. American Economic Review 53: 717–724.
Mundell, R. 1961. A theory of optimum currency areas. American Economic Review 51: 657–665.
Mundell, R. 1968. International economics. New York: Macmillan.
Rose, A. 2000. One money, one market: Estimating the effect of common currencies on trade. Economic Policy 30: 7–46.
Rose, A., and T. Stanley. 2005. A meta-analysis of the effect of common currencies on international trade. Journal of Economic Surveys 19: 347–365.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Rose, A.K. (2018). Currency Unions. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1975
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_1975
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences