Is the Euro Zone an Optimal Currency Area?

16 Pages Posted: 16 May 2007

See all articles by Marjan Petreski

Marjan Petreski

University of American college - Skopje - School of Business Economics and Management

Date Written: March 2007

Abstract

The aim of this paper is to assess whether the Euro zone is an optimal currency area. The judgement is made on the basis of the existing literature and available data for several criteria as a part of the OCA Theory. The ultimate conclusion is that the Euro zone is not an optimal currency area, albeit significant advancements towards it were made past the introduction of the euro, in terms of inflation convergence, financial integration and intra-trade intensification. Yet, the criteria of labour mobility, wage flexibility, fiscal and political integration are far from being satisfied.

Keywords: Eurozone, Optimal currency area

Suggested Citation

Petreski, Marjan, Is the Euro Zone an Optimal Currency Area? (March 2007). Available at SSRN: https://ssrn.com/abstract=986483 or http://dx.doi.org/10.2139/ssrn.986483

Marjan Petreski (Contact Author)

University of American college - Skopje - School of Business Economics and Management ( email )

Skopje, 1000
Macedonia

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