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Monetary Unions and Endogeneity of the OCA Criteria

This article examines an endogeneity issue within the Optimum Currency Area (OCA) theory. According to the cost-benefit analysis, we found that there are the upper and the lower bounds in the degree of monetary integration for a monetary union to be created. We also found that a country may secede from the monetary union, depending on its degree of integration. A country may also secede when production specialization is facilitated with monetary integration within a framework of the “OCA line”. We also consider the endogeneity of the “OCA Index”, and applied our analysis to the optimum number of world currencies.
Year of publication:
2009
Authors: Akiba, Hiroya ; Iida, Yukihiro
Published in:
Global Economic Review. - Taylor & Francis Journals, ISSN 1226-508X. - Vol. 38.2009, 1, p. 101-116
Publisher: Taylor & Francis Journals
Subject: Monetary Union | OCA | endogeneity
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