Optimum Currency Area: The Story of Thinking About

Abstract

In the earlier stage of the European integration, Bela Balassa proposed a five successive phase model about it as a foresight. Today, the half century experience on integration and corresponding literature issued just lets us see rather two big phases (instead of five). The one would be the incipient integration, that came to enlarge the economic openness and internationalization and shaped on: (i) free trade area (FTA) and (ii) customs union; the other would be the advanced integration, in which internationalization would be replaced by the unique-common market and other two commandments would replace or just reshape the older FTA and customs union into: (iii) economic convergence and (iv) optimal currency area. This paper limits its focus on the optimum currency area (OCA), its current description-analysis in the literature and condition inside the EU.

Keywords: Integration; European type integration; incipient & advanced

JEL Classification: A10; B15; B25