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The Optimum Currency Area Puzzle

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  • Filippo Cesarano

Abstract

The theory of optimum currency areas, suggesting the redrawing of currency areas across countries or splitting of national money into several currencies, is at odds with the one-money-one-country pattern that has dominated monetary history for 26 centuries. This paper puts forward an equilibrium approach which, by stressing the influence of the border effect on intranational adjustment, solves the puzzle and analyzes the closely related issue of the viability of monetary unions and regional specialization. Copyright International Atlantic Economic Society 2013

Suggested Citation

  • Filippo Cesarano, 2013. "The Optimum Currency Area Puzzle," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 19(3), pages 259-271, August.
    • Handle: RePEc:kap:iaecre:v:19:y:2013:i:3:p:259-271:10.1007/s11294-013-9404-5
    DOI: 10.1007/s11294-013-9404-5
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    1. Mirdala, Rajmund & Ruščáková, Anna, 2015. "On Origins and Implications of the Sovereign Debt Crisis in the Euro Area," MPRA Paper 68859, University Library of Munich, Germany.

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