A Formal Model of Optimum Currency Areas

Tamim Bayoumi

No 968, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: A model of optimum currency areas is presented using a general equilibrium model with regionally differentiated goods. The choice of a currency union depends upon the size of the underlying disturbances, the correlation between these disturbances, the costs of transactions across currencies, factor mobility across regions, and the interrelationships between demand for different goods. It is found that, while a currency union can raise the welfare of the regions within the union, it unambiguously lowers welfare for those outside the union.

Keywords: Exchange Rates; Optimum Currency Areas (search for similar items in EconPapers)
JEL-codes: F33 F36 (search for similar items in EconPapers)
Date: 1994-06
References: Add references at CitEc
Citations: View citations in EconPapers (83)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=968 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: A Formal Model of Optimum Currency Areas (1994)
Working Paper: A Formal Model of Optimum Currency Areas (1994)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:968

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=968

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().