This Paper seeks to trace the impact of monetary arrangements on trade integration and business cycle correlation, focusing on Europe in the late 19th century period as a guide for modern debates. For this purpose, we first estimate a gravity model and show that monetary arrangements were...

In this paper we study the adjustment of a N-country world economy to an unfavourable common supply shock. We show that world-wide monetary policy coordination is essential to achieve an optimal adjustment to the common shock, but that its actual implementation requires careful design to ensure...