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Strategic Games and Currency areas

Author

Listed:
  • George D. Demopoulos

    (Athens University of Economics and Business)

  • Nicholas A. Yannacopoulos

    (Athens University of Economics and Business)

Abstract

The requirement that a country with a current account surplus should have an expanding money supply, while a country with a current account deficit a contracting mo- ney supply (the “rules of the game”) is an important element for the stability of a cu- rrency area. We argue in this paper, that decentralized behaviour of member countries does not guarantee that the “rule of the game” are respected, and this leads the currency area to equilibria, however, with systemic distortions1.

Suggested Citation

  • George D. Demopoulos & Nicholas A. Yannacopoulos, 2015. "Strategic Games and Currency areas," Working Papers 201501, Athens University Of Economics and Business, Department of Economics.
    • Handle: RePEc:aeb:wpaper:201501:y:2015
    as

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    File URL: http://www2.econ.aueb.gr/uploadfiles/AllDP0115
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    References listed on IDEAS

    as
    1. Masson,Paul R. & Taylor,Mark P. (ed.), 1993. "Policy Issues in the Operation of Currency Unions," Cambridge Books, Cambridge University Press, number 9780521434553, October.
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    More about this item

    Keywords

    Currency areas; dynamics of economic integration; stability equilibrium conditions.;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F15 - International Economics - - Trade - - - Economic Integration

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