This paper presents an ex-post assessment of the current situation of the Economic and Monetary Union (EMU) in light of the conditions prescribed by the theory of Optimum Currency Areas (OCA). The analysis shows that those conditions were satisfied at very different degrees. Factors mobility has...

While many commentators have been openly critical of China's currency policy on the basis of an undervalued renminbi, despite a similar surge in GCC's (Gulf Cooperation Council) balance of payment surpluses in the first decade of this century, the vast majority of the commentators have...

We study the optimal design of a fiscal union within a currency union using an open economy model with nominal rigidities. We show that the optimal design of a fiscal union depends crucially on the degree of financial integration across countries as well as the elasticity of substitution between...

In a 2-country monetary union, this paper studies a Stackelberg game be- tween the Central Banker and two symmetrical countries. The central banker chooses the money supply. In each country, there is a union who acts as a monopoly of labor supply. Firms are wage and price takers. We analyze the...

This paper analyzes the costs and benefits for an emerging economy to formally adopt dollarization. The magnitude of the costs and benefits involved in this process will not be the same for all countries and depend on the particular characteristics of each economy as well as its relationship...

Some countries may face choice between targeting inflation independently and entering a monetary union that targets inflation. This paper shows that the choice of a country in favour of monetary union may be motivated by asymmetrical supply shocks. The demand shocks are neutralised under these...

About five decades the Franc CFA-Zone in Western and Central Africa was praised as incarnation of economic and political stability in Africa, backed by France. But free convertibility and fixed parity, guaranteed by the French Treasury, mainly served the interest of a small elite of the...

Variations between the diverse pension systems in the member states of the European Union hamper labour market mobility, across country borders but also within the countries of the European Union. From a macroeconomic perspective, and in the light of demographic pressure, this paper argues that...

Responses of inflation and non-oil output growth from the Gulf Cooperation Council (GCC) countries to monetary policy shocks from the United States (US) were estimated to determine whether there is evidence to support the US Dollar as the anchor for the proposed unified currency. A structural...

The failure of key EU Member States to respect the provisions of the Stability and Growth Pact (SGP) a few years after its inception triggered a heated debate on how to reform the framework of fiscal policy coordination in the Economic and Monetary Union (EMU). This paper analyzes 101 reform...