scholarly journals European monetary union, optimum currency area and possible effects of slovakia's joining the euro area

2008 ◽  
Vol 56 (3) ◽  
pp. 318-344 ◽  
Author(s):  
Jan Iša ◽  
Ivan Okáli
Keyword(s):  
Monetary Union ◽  
Euro Area ◽  
European Monetary Union ◽  
Optimum Currency Area ◽  
European Monetary ◽  
Currency Area ◽  
Optimum Currency

scholarly journals EMU – “Optimum” or “Viable” Currency Area?

2012 ◽  
Author(s):  
Andreea Bucur
Keyword(s):  
European Union ◽  
Economic Integration ◽  
Monetary Union ◽  
European Monetary Union ◽  
Research Effort ◽  
Optimum Currency Area ◽  
European Monetary ◽  
European Union Enlargement ◽  
Currency Area ◽  
Optimum Currency

Although the increasing heterogeneity as an effect of European Union enlargement, referring especially to the last two waves, is perceived as a single internal market and also euro single currency risk, European Monetary Union represents an important step towards deepening economic integration. Controversy on the Optimum Currency Area issue has created difficulties in empirical research effort to find appropriate responses to the EMU dilemma: is Euro zone an „optimum” or rather “viable” currency area?

Is the Euro Working? The Euro and European Labour Markets

2004 ◽  
Vol 24 (2) ◽  
pp. 147-168 ◽  
Author(s):  
STEPHEN J. SILVIA
Keyword(s):  
Monetary Policy ◽  
Monetary Union ◽  
Euro Area ◽  
European Monetary Union ◽  
Structural Adjustment ◽  
Labour Markets ◽  
Fiscal Consolidation ◽  
European Monetary ◽  
Currency Area ◽  
Made In

Now that time has passed since the introduction of the euro as a commercial currency, it is possible to assess many arguments made in the abstract during the 1990s about European monetary union. This article shows that the euro zone still falls short as an optimal currency area in most respects. In particular, it undertakes an empirical analysis of the labour market and finds no progress toward flexibility or integration. These results challenge assertions of ‘endogenous currency area’ proponents that the euro area would become optimal ‘after the fact’, and that labour markets would serve as the principal avenue of adjustment. Instead, a ‘rigidity trap’ has developed in the euro area, consisting of relatively tight monetary policy, forced fiscal consolidation, and a risk of deflation in some economies. These conditions have compounded the difficulties of structural adjustment in European labour markets.

scholarly journals OCA INDEX AS INDICATOR OF THE CZECH REPUBLIC'S PREPAREDNESS TO JOIN THE EUROPEAN MONETARY UNION

2021 ◽  
Vol 11 (2) ◽  
pp. 91-94
Author(s):  
SARKA HYBLEROVA
Keyword(s):  
Czech Republic ◽  
Monetary Union ◽  
Euro Area ◽  
European Monetary Union ◽  
Common Currency ◽  
European Monetary ◽  
The Czech Republic ◽  
Currency Area ◽  
Using Data ◽  
Key Indicators

The optimum currency area (OCA) theory evaluates the currency area as optimum at a time when the participating countries are not at risk of macroeconomic instability due to the existence of a common currency. The OCA index is a tool used to comprehensively assess the costs and benefits of a candidate for joining a monetary union. It is constructed as a bilateral index assessing the appropriateness of introducing the single currency in two countries. The article presents the OCA index quantified for the Czech Republic in relation to Germany, which is considered to be the core of the European Monetary Union. Since the OCA index needs to be interpreted in a temporal or spatial comparison, the calculation of the OCA index was also performed for other countries of the Visegrad Group (V4) and furthermore for Austria and Portugal, using data from the period of 2007–2019. The results of the OCA index show a high degree of variability in the Czech Republic in the observed period. While in the first half of the period under review, the Czech Republic achieved the best results within the assessed economies and the Czech Republic's level of preparedness for the common currency with Germany was higher than in the case of Austria, it fell sharply after 2012. The reason can be seen, among other things, in the higher growth rate of the Czech economy than in the euro area. Although the OCA index is an indicator assessing the preparedness of an economy to join a monetary union, it cannot be the only indicator. Other important criteria include, for example, labour mobility, price and wage flexibility, fiscal integration and more. Although the Czech Republic is approaching the euro area average in all key indicators, the gap from it remains significant for most indicators and thus continues to be a factor against the adoption of the euro in the coming years.

scholarly journals Fiscal stabilisation policy in the EMU. An insight from the theory of optimum currency areas

2020 ◽  
pp. 43-60
Author(s):  
Małgorzata Misiak
Keyword(s):  
Economic Integration ◽  
Monetary Union ◽  
European Monetary Union ◽  
The European Union ◽  
Optimum Currency Areas ◽  
European Monetary ◽  
Theoretical Underpinning ◽  
Stabilisation Policy ◽  
Currency Area ◽  
Optimum Currency

The aim of the paper is to examine the role and place of the fiscal stabilisation policy in the European Monetary Union (EMU) from the perspective of the theory of optimum currency areas (OCA). We examine the theoretical underpinning for the policy to mitigate the economic fluctuations in a monetary union, and answer the questions of whether fiscal integration is a prerequisite for the “optimality” of a currency area and at what level of governance a stabilising fiscal policy should be conducted. We conclude with a short revision of how OCA theory is applied to the project of monetary and economic integration in the European Union (EU) and some conclusions for future development and research.

scholarly journals Empirical Results for Some Monetary Areas According to Optimum Currency Area Criteria

2015 ◽  
Vol 63 (3) ◽  
pp. 877-885
Author(s):  
Emil Adámek ◽  
Stanislav Kappel
Keyword(s):  
Monetary Union ◽  
Euro Area ◽  
Optimum Currency Area ◽  
Common Currency ◽  
Currency Area ◽  
The World ◽  
The Usa ◽  
Time Average ◽  
Oca Criteria ◽  
Optimum Currency

The euro area is the biggest monetary union in the World. In post-crisis time, the possibilities of creation a new monetary union are discussed again. The aim of this article is to evaluate, according to OCA criteria, an appropriateness of selected countries for a membership in a monetary union or for creation new monetary union. The second aim is to confront the existing monetary union – the euro area, with two potential monetary areas – NAFTA and MERCOSUR. The criteria are based on the OCA theory and partly on the so called OCA index. According to the results, there are countries (so called core countries) such as Austria or Luxemburg which reach satisfactory values. On the other hand there are countries such as Estonia, Finland, Latvia, Greece or Italy which reach worse values. Quite surprisingly, the values of most indicators (except for DISSIM) have worsened since the crisis in the euro area. It seems to be convenient for both Canada and Mexico to adopt a common currency with the USA. In case of MERCOSUR we could barely find a pair of countries with better values compare with euro area’s all-time average.

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