How Many Monies? A Genetic Approach to Finding Optimum Currency Areas

41 Pages Posted: 6 Sep 2000 Last revised: 25 Aug 2010

See all articles by Atish R. Ghosh

Atish R. Ghosh

International Monetary Fund (IMF) - Policy Development and Review Department

Holger C. Wolf

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS)

Multiple version iconThere are 2 versions of this paper

Date Written: July 1994

Abstract

Recent moves towards greater monetary integration in Western Europe - and disintegration in Eastern Europe and the former Soviet Union - have rekindled interest in the theoretical and empirical aspects of optimal currency areas (OCA). In this paper, we examine the marginal benefit of increasing the number of currency unions within a given geographical area. We look at six regions; the United States, Europe, the G7, the CFA zone, the FSU and the world at large. Our results suggest that (i) contiguous monetary unions are typically dominated by non-contiguous unions; (ii) neither Europe nor the United States form an optimum currency area, for both regions the costs of adopting a single currency exceeds estimates of the transaction cost savings; (iii) Germany and the United States will almost never find it to their (economic) advantage to join monetary unions.

Suggested Citation

Ghosh, Atish R. and Wolf, Holger C., How Many Monies? A Genetic Approach to Finding Optimum Currency Areas (July 1994). NBER Working Paper No. w4805. Available at SSRN: https://ssrn.com/abstract=226514

Atish R. Ghosh (Contact Author)

International Monetary Fund (IMF) - Policy Development and Review Department ( email )

700 19th St. NW
Washington, DC 20431
United States

Holger C. Wolf

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS) ( email )

Washington, DC 20057
United States
202-687-8079 (Phone)
202-687-8359 (Fax)

HOME PAGE: http://georgetown.edu/faculty/wolfhc/

Register to save articles to
your library

Register

Paper statistics

Downloads
46
Abstract Views
867
PlumX Metrics