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"A Sustainable EU-27 Single Currency? Political Criteria for Optimal currency Areas"

Sadeh, Tal T. (2003) "A Sustainable EU-27 Single Currency? Political Criteria for Optimal currency Areas". In: UNSPECIFIED, Nashville, Tennessee. (Unpublished)

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    Abstract

    This study tries to find which EU member states and candidate countries can sustain a currency link. I use Bayoumi and Eichengreen’s procedure of two-step least squares cross-section regression analysis for estimating exchange rate variation among 26 European countries, integrating domestic political factors into an Optimal Currency Area analysis framework. Excluding political variables a currency union is found sustainable among combinations of 2-6 countries, none including more than one major EU economy. Economically, Germany is the leading core country, followed by France and the UK. Including political variables Germany and eight other small countries are singled out, while the UK becomes an almost equal alternative core to Germany, with six potential currency partners. Considering domestic politics France and Italy are unstable Euro-zone members. The candidate countries are a long way from a sustainable currency union with the EU.

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    Item Type: Conference or Workshop Item (UNSPECIFIED)
    Uncontrolled Keywords: Currency unions; Optimal Currency Area.
    Subjects for non-EU documents: EU policies and themes > Treaty reform > enlargement
    EU policies and themes > Policies & related activities > economic and financial affairs > EMU/EMS/euro
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Conference: European Union Studies Association (EUSA) > Biennial Conference > 2003 (8th), March 27-29, 2003
    Depositing User: Tal Sadeh
    Official EU Document: No
    Language: English
    Date Deposited: 17 Mar 2003
    Page Range: p. 33
    Last Modified: 15 Feb 2011 17:15
    URI: http://aei.pitt.edu/id/eprint/382

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