In 1961, in the earlier stage of the European integration, professor Bela Balassa proposed a five successive phase model. Today, the half century experience on integration and corresponding literature issued lets us see rather two big phases (instead of five). The one would be the incipient...

This work aims to assess whether the hypothesis of endogenous synchronisation of shocks is verified in the European Economic and Monetary Union (EMU). A state-space model, which yields time-varying coefficients, is estimated with structural demand and supply shocks to several European economies...

When real wages in an economy no longer reflect productivity, normally devaluations of the currency restore international price-competitiveness via imported inflation that reduces real wages. This instrument is not available in a currency union. The job has to be done by reductions in nominal...

This essay considers some prescriptions that are currently popular regarding exchange rate regimes: a general movement toward floating, a general movement toward fixing, or a general movement toward either extreme and away from the middle. The whole spectrum from fixed to floating is covered...

This paper characterizes the integration patterns of international currency unions (such as the CFA Franc zone and the East Caribbean Currency Area). We empirically explore different features of currency unions, and compare them both to countries with sovereign monies, and to regions within...

What is the optimal number of currencies in the world? Common currencies affect trading costs and, thereby, the amounts of trade, output, and consumption. From the perspective of monetary policy, the adoption of another country's currency trades off the benefits of commitment to price stability...