Optimum Currency Areas and Asymmetric Shocks: Comparison of Two Studies

MAIN Laboratory (Management & Innovazione) Working Paper Series

11 Pages Posted: 11 Jul 2011 Last revised: 19 Oct 2011

See all articles by Mico Apostolov

Mico Apostolov

University Goce Delcev; University of Turin; Scuola Superiore Sant'Anna di Pisa - School of Social Sciences; University of California, Berkeley - Haas School of Business

Date Written: 2011

Abstract

Optimum currency areas are very important notion in the integration processes and many debates are conducted questioning whether or not such construction can be achieved. Modern theoretical analyses give chance on the possibility that optimum currency areas can in fact function, however doubt is also expressed in relation to asymmetric shocks and their influence on the overall OCA functionality and presence.

We use two papers and contradict the arguments in order to give better light to this very important issue for EU and Euro area integration processes. On the one hand, there are important conclusions made by Krugman which shadow fusibility of the concept of European Monetary Union, and on the other hand there is the study of Frankel Jeffrey and Rose Andrew that opposes to such findings.

Keywords: Optimum currency areas, asymmetric shocks, EMU, US

JEL Classification: E52, E61, P52, N12 , N14

Suggested Citation

Apostolov, Mico, Optimum Currency Areas and Asymmetric Shocks: Comparison of Two Studies (2011). MAIN Laboratory (Management & Innovazione) Working Paper Series, Available at SSRN: https://ssrn.com/abstract=1881142 or http://dx.doi.org/10.2139/ssrn.1881142

Mico Apostolov (Contact Author)

University Goce Delcev

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Macedonia

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University of Turin ( email )

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Scuola Superiore Sant'Anna di Pisa - School of Social Sciences ( email )

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Pisa, 56127
Italy
+39 329 1825 185 (Phone)

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University of California, Berkeley - Haas School of Business

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Berkeley, CA 94720
United States
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HOME PAGE: http://www.micoapostolov.com/

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