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What Do we Now Know About Currency Unions?

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  • Michael Artis

Abstract

The paper presents the text of an inaugural lecture given at the Bank of England in December 2005 in memory of John Flemming. It provides a personal view of the lessons that can be drawn about currency unions from the experience of the European Monetary Union. It argues that business cycle concurrence is a less important criterion for participation than was once believed. Most important is the integration of financial markets and the shrinking of financial premia that individual countries face: this opens the way for countries to share risk, thereby enhancing welfare.

Suggested Citation

  • Michael Artis, 2006. "What Do we Now Know About Currency Unions?," Economie Internationale, CEPII research center, issue 107, pages 9-28.
    • Handle: RePEc:cii:cepiei:2006-3ta
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    Cited by:

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    2. Marc-Alexandre Sénégas, 2010. "La théorie des zones monétaires optimales au regard de l'euro : Quels enseignements après dix années d'union économique et monétaire en Europe ?," Revue d'économie politique, Dalloz, vol. 120(2), pages 379-419.
    3. Oluwole Owoye & Olugbenga A. Onafowora, 2014. "The Economic Impact Analysis of the Euro Currency on Twelve Member Countries of the European Union," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 2(4), pages 229-244.
    4. Joan Costa-i-Font, 2010. "Regional Single Currency Effects on Bilateral Trade with the European Union," LEQS – LSE 'Europe in Question' Discussion Paper Series 26, European Institute, LSE.
    5. Laurissa Mühlich, 2011. "South–South Regional Monetary Cooperation: Potential Gains for Developing Countries and Emerging Markets," Chapters, in: Ulrich Volz (ed.), Regional Integration, Economic Development and Global Governance, chapter 13, Edward Elgar Publishing.

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    More about this item

    Keywords

    Currency union; European Monetary Union; financial integration; business cycle convergence; trade creation; monetary block; financial globalization; EMU;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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