The paper applies fuzzy clustering techniques to the member countries of the European Union in order to arrive at an identification of preferred monetary union groupings. The statistical criteria employed are those suggested, alternatively, by the traditional Optimal Currency Area theory or the...

Optimal Currency Area (OCA) theory offers criteria for evaluating the optimality of monetary union arrangements. This paper reviews the use that has been made of these criteria in the specific context of European Monetary Union. It reviews the use of business cycle synchronization data and the...