Rethinking Optimal Currency Areas

• 成果类型: Article
• 署名作者: Chari, V. V.; Dovis, Alessandro; Kehoe, Patrick J.
• 署名单位: University of Minnesota System; University of Minnesota Twin Cities; University of Pennsylvania; Stanford University; University of London; University College London; Federal Reserve System - USA; Federal Reserve Bank - Minneapolis; National Bureau of Economic Research
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2019.01.023
• 发表日期: 2020
• 页码: 80-94
• 关键词: Flexible exchange rates; Optimum currency areas

摘要

The traditional Mundellian criterion for optimal currency areas, which implicitly assumes commitment to monetary policy, is that countries with similar shocks should form unions. Without such commitment a new criterion emerges: countries with dissimilar temptation shocks, namely those that exacerbate time inconsistency problems, should form unions. Crucially, all countries influence policy in that policy is chosen either cooperatively or by majority rule. Our model, applied to the European Monetary Union, captures the idea that many Southern European countries gained credibility by joining the union and motivates why Northern European countries chose to admit countries with historically lower credibility. (C) 2019 Published by Elsevier B.V.