Optimum currency area indices: evidence from the 1990s
Horváth, Roman and Komárek, Luboš (2003) Optimum currency area indices: evidence from the 1990s. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.665).
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In this paper the authors calculate OCA-indexes for industrial countries in an effort to estimate the benefit-cost ratio of adopting a common currency. The results correspond to the estimation of Bayoumi and Eichengreen (1997b) and show that the ranking of the economies suitable to form a monetary union stays the same in the 1980s as well as in the 1990s. In other words, the economies, which were structurally close to each other in the 1980s, remain close in the 1990s and the opposite is valid for the structurally different economies. This empirical estimation also does not provide evidence for views, which emphasise the seemingly striking difference between the core and the periphery of the European Union. The authors perform also an estimation of the same index by including the Czech Republic and find no support for the view that the economy of the Czech Republic could possibly structurally differ more than the EMU member countries between each other. Then they conclude that if the EMU is sustainable, the accession of the Czech economy should not change it.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HG Finance
H Social Sciences > HB Economic Theory
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Monetary unions, Monetary policy -- European Union countries, Dependency, Convergence (Economics), European Union -- Economic conditions , Czech Republic -- Economic conditions|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Official Date:||January 2003|
|Number of Pages:||19|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
Bayoumi, T. and Eichengreen, B. (1993): Shocking Aspects of European Monetary Integration, in: Torres, G. and Giavazzi, F.: Adjustment and Growth in European Monetary Union. Cambridge University Press, 1993, pp.193-229.
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