De Grauwe, Paul; Ji, Yuemei - In: Credit and Capital Markets – Kredit und Kapital 49 (2016) 3, pp. 375-413
The optimal currency areas (OCA) theory has been influential in pushing eurozone countries towards structural reforms to make product and labour markets more flexible. The underlying assumption of the OCA prescription for structural reform is that asymmetric shocks are permanent. However, when...