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Currency Unions in Prospect and Retrospect

Santos Silva, Joao M C and Tenreyro, Silvana (2010) 'Currency Unions in Prospect and Retrospect.' Annual Review of Economics, 2 (1). pp. 51-74. ISSN 1941-1383

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Abstract

We critically review the recent literature on currency unions and discuss the methodological challenges posed by the empirical assessment of their costs and benefits. In the process, we provide evidence on the economic effects of the euro. In particular, and in contrast with estimates of the trade effect of other currency unions, we find that the euro's impact on trade has been close to zero. After reviewing the costs and benefits of joining a currency union, we conclude with some open questions on normative and positive aspects of the theory of currency unions, emphasizing the need for a unified welfare-based framework to weigh their costs and gains.

Item Type: Article
Uncontrolled Keywords: effects of currency unions; euro; monetary union; optimum currency areas; trade
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 07 Aug 2012 09:49
Last Modified: 07 Aug 2012 09:49
URI: http://repository.essex.ac.uk/id/eprint/3538

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