The paper addresses the question what effects the enlargement of a monetary union will have on necessary structural refoms in the (low distortion) member countries and the (high distortion) candidate country. While monetary union lowers reforms in the candidate country, members of the monetary...

It is conventionally held that countries are worse off by forming a monetary union when it comes to macroeconomic stabilization. However, this conventional view relies on assuming that monetary policy is conducted optimally. Relaxing the assumption of optimal monetary policy not only uncovers...

It is conventionally held that countries are worse off by forming a monetary union when it comes to macroeconomic stabilization. However, this conventional view relies on assuming that monetary policy is conducted optimally. Relaxing the assumption of optimal monetary policy not only uncovers...

A traditional OCA criterion holds that the more symmetric the shock exposure of countries, the more suited they are for currency union. According to Frankel and Rose (1998, 2002), growing correlation of the ex post income fluctuations of members also can provide endogenous justification for...

A traditional OCA criterion holds that the more symmetric the shock exposure of countries, the more suited they are for currency union. According to Frankel and Rose (1998, 2002), growing correlation of the ex post income fluctuations of members also can provide endogenous justification for...