Search

How does a monetary union alter the impact of business cycle shocks at the household level? We develop a Heterogeneous Agent New Keynesian model of two countries (HANK2) and show in closed form that a monetary union shifts the adjustment to a shock horizontally - across countries - within the brackets of the union-wide wealth distribution rather than vertically - that is, across the brackets of the union-wide wealth distribution. Calibrating the model to the euro area reveals that a monetary union alters the impact of shocks most strongly in the tails of the wealth distribution but leaves the middle class almost unaffected.

The Euro Area remains a well-known monetary union in the World. But the possibilities of creation of new monetary unions are discussed. It is spoken about NAFTA (Canada, Mexico and the United States) or MERCOSUR (Argentina, Brazil, Paraguay, Uruguay and Venezuela). The aim of this paper is to assess the similarity of demand and supply shocks in the countries of NAFTA and MERCOSUR, and to compare it with the countries of the Euro Area. For these aims, correlation and structural vector autoregression methods are used. Methods are based on Blanchard and Quah (1989) and Bayoumi and Eichengreen (1993). We confirm the existence of core states and periphery states in the Euro Area with some exceptions. If we compare supply and demand shocks, we find more similarity in the case of supply shocks in the countries of the Euro Area. According to the results, the countries of NAFTA are more appropriate for the creation of monetary union than the countries of MERCOSUR. The countries of NAFTA achieve high correlation coefficients of supply and demand shocks (except Mexico for supply shocks).

در سال­های اخیر، تشکیل اتحادیه پولی کشورهای اسلامی مورد توجه بسیاری از کشورهای عضو سازمان کنفرانس اسلامی (OIC) قرار گرفته است. در این پژوهش اثر تشکیل اتحادیه پولی بر تجارت در 49 کشور اسلامی در دوره 1990-2011 با استفاده از تئوری (OCA) و مدل جاذبه تعمیم یافته مورد بررسی قرار گرفته است. نتایج پژوهش بیانگر این است که مرز مشترک، زبان مشترک و وجود اتحادیه‌های تجاری اثر مثبت و معنی دار و نوسانات نرخ ارز، محصور بودن در خشکی و فاصله بین کشور مبدأ و مقصد اثر منفی و معنی داری بر جریان تجارت بین کشورهای اسلامی داشته‌اند. همچنین، تشکیل اتحادیه پولی اثر مثبت و معنی داری بر جریان تجارت کشورهای (OIC) دارد.

The submitted thesis focuses on the Economic and Monetary Union and its stability or instability with respect to theory of optimal currency areas. The aim of the thesis is to evaluate whether the current euro area is the optimal currency area, what possible ways of reducing the costs of the common currency exist and what are the economic consequences of a potential breakdown of the Economic and Monetary Union. The analysis of the theory of optimal currency areas is the subject of the first part of this thesis and its criteria are evaluated in the second part. The second part then deals with the economic implications of this theory in practice.

The purpose of our paper is to define rules for decision of existence spurious synchronization of countries within the currency area. We devote this new methodological approach from an empirical research based on the variability of a dynamic correlation (correlation in frequency domain). We analyze the dynamic correlation in full range and in the business cycle frequencies as well. We also consider lags in economic activity co-movements. Contrary to the standard approach we show its insufficiency especially in case of time domain instruments. For this goal GDP values in quarters of the four Visegrad countries and the Eurozone in the period 1997/Q1-2011/Q1 are used.

The aim of this paper is to assess the importance played by economic divergences in the current crisis of the euro area. Since the introduction of the single currency there were many debates regarding the heterogeneity of the countries that adopted it. Heterogeneity represents an impediment for the smooth adjustment in the event of asymmetric shocks. The optimal currency theory was the first to present the adjustment mechanisms. In order to quantify the influence of structural diversity on the disturbances in the euro area, we have analyzed the evolution of standard deviation for some of the key indicators. This study will provide a clear understanding of the factors that caused imbalances in the euro area. It is common to draw conclusions upon isolated factors that led to the present financial crisis and to find extreme solutions like the collapse of the monetary union in Europe. This article shows that analyzing the structure of the union gives an appropriate understanding of the mistakes that have been made.

The goal of this thesis is to evaluate the readiness of the member states of NAFTA to adopt a common currency or some other narrower monetary arrangement. This readiness is evaluated by the lens of Optimum currency areas theory (OCA). This thesis provides an overview of the basic OCA criteria, estimates the Optimum Currency Areas Index as a tool to assessing the fulfillment of OCA criteria and readiness of the countries of NAFTA to adopt a common currency or some other narrower monetary arrangement along the lines of the European monetary union. The results of this research indicates that Canada vis a vis USA is in state of advanced convergence and Mexico converges towards the USA economy. We can say that on the basis of OCA criteria the common currency arrangement is likely to be possible in the near future.

This article studies the symmetry in reactions of the Andean Community of Nations (CAN) economies to external shocks in order to analyze the group's evolution towards economic integration. The undertaking of a Monetary Union project in South America enhances the usefulness of evaluating shocks within this region according to the Optimal Currency Area Theory. A Structural VAR model with non-recursive contemporaneous restrictions is built for each economy and a correlation analysis is performed. The results evidence that the CAN has evolved positively towards structural convergence.

In my diploma thesis, I study optimality of the European Economic and Monetary Union on basis of principles of the Theory of Optimum Currency Areas -- OCA, with special attention to the criterion defined by R.A.Mundell. I point out some rigidities of the European labor market because of which this criterion is not met. On basis of an assumption that the more countries meet these criteria, the more suitable candidates for an entry of the monetary union they are, I reach a conclusion that EMU is not an optimal monetary zone. Nonetheless, the thesis does not ignore a hypothesis of the endogenous character of the OCA theory criteria, i.e. that they can be met even after an entry of the monetary union. Furthermore, with respect to the OCA theory criteria, I study appropriateness of the set Maastricht Convergence Criteria for evaluation of preparedness of countries for an entry of the EMU. The thesis also deals with potential revenues and costs of the introduction of euro in the Czech Republic. At the end of the thesis, I suggest potential alternatives of future development of EMU with respect to the current problems of the monetary union.

The aim of this bachelor thesis is to discuss how well the Czech economy is prepared to enter the eurozone. It first briefly describes the conception and development of the European Economic and Monetary Union, the Maastricht criteria and the economic convergence criteria. It further considers the potential advantages and disadvantages offered to the Czech Republic from EMU membership, and then judges the Czech Republic's fulfilment of the Maastricht criteria. The last chapter focuses on the current economic convergence between the Czech Republic and the euro area. Finally the work evaluates the position of the Czech economy and concludes that in the short term the Czech Republic is not ready to adopt the Euro.

Bachelor thesis analyzes the influence of effects of the global financial crisis on the term of the euro adoption in the Czech republic. Effects of the global financial crisis are analyzed in connection with OCA theory, on which this thesis is theoretically based, as an economic shock whose impacts on the members of EMU are asymetric. Thesis also analyzes potential benefits and costs of the euro adoption in the Czech republic and tries to estimate its range. In conclusion thesis summarizes how advantageous the option of the fast euro adoption in the Czech republic is.

The aim of this bachelor thesis is to discuss whether the Czech Republic is well prepared or not to join The European Economic and Monetary Union. It also describes the advantages and disadvantages connected with membership in The EMU. At the beginning it describes The European Economic and Monetary Union and the process of its formation. It also pays attention to the Maastricht criteria. Their performance is necessary for becoming a member of the EMU. It deals with economic convergence between the Czech Republic and other members of the EMU. Another topic of this work is the current performance of the Maastricht criteria by the Czech Republic. .In the last chapter it focuses on the current economic situation in the Czech Republic and the current economic convergence to the EMU. Finally this work evaluates that in these days the Czech Republic is not ready to join the European Economic and Monetary Union.

The master thesis deals with european monetary integration. Its aim is to evaluate results of eurozone performance mainly for the first ten years of its existence. The thesis starts with short historical introduction, than continues by analysis OCA theory and Maastricht convergence criteria. The evaluation of effects, which eurozone brought to its members or candidates is made firstly from the point of view of monetary policy and than by confirming or refusing arguments for euro (non)adoption.

In the run-up to EMU, academic economists generally concluded the EU as a whole was not an optimum currency area (OCA). An important reason was the lack of structural convergence between the potential members of the monetary union. Nevertheless, the euro area currently consists of twelve countries. In the near to medium future, twelve additional countries will become EU Members; most of these countries have announced they want swift euro area entry. This paper reviews the literature on optimum currency areas to clarify the concept of structural convergence in the context of monetary integration. In addition, we operationalise OCA theory to assess structural convergence within Europe. The available evidence indicates considerable divergence within the current euro area and a generally slow process of convergence. In contrast, a number of new EU entrants have converged significantly in recent years towards levels of at least some existing members.

In diesem Beitrag folgen wir der aktuellen Diskussion über die Aussagekraft der Maastricht-Kriterien für die Auswahl von Ländern zur Teilnahme an der EWU. Es wird gezeigt, daß diese Kriterien weder die Theorie optimaler Währungsgebiete ausreichend reflektieren noch der Endogenitätsproblematik ausweichen können. Realwirtschaftliche Konvergenz dagegen gemessen an der Höhe des eigenen PKE und am Abstand zu den führenden Ländern hilft bei der Auswahl möglicher Kandidaten unter den emerging economies für die Aufnahme in die EWU. Vor dem Hintergrund des Balassa-Samuelson und des Kravis-Lipsey-Bhagwati-Effekts ergibt die theoretische Analyse, daß die Variabilität des realen Wechselkurses in einer Währungsunion um so mehr steigt, je höher der Anteil der Nontradeables in den Mitgliedstaaten, je größer die Zahl der (identischen) Teilnehmer an der Währungsunion mit entsprechend geringem Wertschöpfungsanteil und je stärker das Gefälle im Wachstum der beiden Sektoren unter den Mitgliedern der Währungsunion ist. Bei der Aufnahme weiterer Mitglieder in die EURO-Zone sind sowohl realwirtschaftliche als auch Finanzmarktkriterien heranzuziehen. Solange bei Kandidaten ein zu großes Gefälle zum Kern der EWU besteht, können realwirtschaftliche und Finanzmarktkriterien im Grunde genommen als Ersatz für die Maastricht-Kriterien dienen. Ein Vorbild können dabei entsprechende Vorschläge in Artikel 121 des EG-Vertrages abgeben. This paper deals with main issues of the ongoing discussion about the appropriateness of the Maastricht criteria to determine the members of the EURO zone. The Maastricht criteria suffer from two weaknesses: neither do they reflect sufficiently the theory of optimum currency areas (OCA) nor can they avoid the so-called endogeneity problem. Opposed to that the level of the per capita income achieved and the distance to the advanced countries seem to play an important role when it comes to assess the candidates for a monetary union from the group of the emerging economies. Furthermore, in the framework of the Balassa-Samuelson and the Kravis-Lipsey-Bhagwati effects, we show that the variability of the real exchange rate within a monetary union rises with the share non-tradeables goods have in the economy of member countries, the higher the number of small participants in the common currency area is and the greater the descent of growth observed among the two sectors (tradeables, non-tradeables) in the respective member countries. In the light of the forthcoming widening of the EURO zone we suggest to make use of additional criteria which stress real convergence as they can be found in article 121 of the European treaty. Moreover, as long as the distance to the core of the EMU countries is still large, real convergence criteria can serve as substitutes to the Maastricht criteria.