This paper studies a multi-country currency union of small open economies. Demand-side disturbances hamper monetary union stabilisation unless participating countries’ business cycles are perfectly synchronised. In the face of country-specific supply shocks, a currency union of small open...

This paper assesses the prospects for monetary integration between Emerging East Asian (EEA) economies. We develop a simple analytical framework for currency unions of small open economies. The empirical analysis looks at a number of supply-side characteristics of EEA countries highlighted by...

We report transparency scores and growth indicators for the euro area and various classes of potential euro area candidates. We then study currency union stabilization when monetary policy transparency may be imperfect and supply conditions may be country-specific. Sectoral productivity shocks...

Currency union participation may create a welfare tradeoff relating to monetary factors. Stabilisation costs arise from asymmetric shocks across the union. Countries pursuing discretionary national monetary policies benefit from a committed common central bank, which eliminates...