Please use this identifier to cite or link to this item: https://hdl.handle.net/2440/16850
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Type: Journal article
Title: Currency areas in theory and practice
Author: Pomfret, R.
Citation: The Economic Record, 2005; 81(253):166-176
Publisher: Blackwell Publishing Asia
Issue Date: 2005
ISSN: 0013-0249
1475-4932
Statement of
Responsibility: 
Richard Pomfret
Abstract: The dominant theoretical framework for analysing currency domains, optimum currency area (OCA) theory, has a miserable record in explaining actual currency area formation, expansion or dissolution. Ministates use foreign currencies to avoid high transactions costs; otherwise countries want control over their monetary policy. Nations do not tolerate multiple currencies, because they complicate public revenue and expenditure decisions. These arguments regarding control of monetary policy and content of fiscal policy differ from the OCA theory's emphasis on a trade-off between the microeconomic transactions costs benefits of a wider currency area and the macroeconomic policy benefits of a narrower currency area.
Description: The definitive version is available at www.blackwell-synergy.com
DOI: 10.1111/j.1475-4932.2005.00241.x
Published version: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1475-4932.2005.00241.x
Appears in Collections:Aurora harvest 2
Economics publications

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