Currency Unions
(2019) p.747-770- Abstract
- Currency unions have been a recurring phenomenon in monetary history. The most basic definition of a currency union is when two or more sovereign nations share a common currency. Even though a currency union shares many characteristics with international monetary regimes based on fixed exchange rates (such as the Bretton Wood system), it is the most extreme case of a fixed exchange rate as it also implies sharing a common unit of account between the participating countries. While the economic rationale for currency unions focuses on gains in monetary efficiency from decreasing transaction costs, history shows that political reasons also played a key role. In this chapter, I discuss the theoretical foundations of monetary unions (the... (More)
- Currency unions have been a recurring phenomenon in monetary history. The most basic definition of a currency union is when two or more sovereign nations share a common currency. Even though a currency union shares many characteristics with international monetary regimes based on fixed exchange rates (such as the Bretton Wood system), it is the most extreme case of a fixed exchange rate as it also implies sharing a common unit of account between the participating countries. While the economic rationale for currency unions focuses on gains in monetary efficiency from decreasing transaction costs, history shows that political reasons also played a key role. In this chapter, I discuss the theoretical foundations of monetary unions (the so-called optimum currency area theory) and analyze the most important historical cases of currency unification, both domestic (the USA, Germany) and international. Finally I discuss the key lessons we can draw from the history of currency unions and their implications for the Economic and Monetary Union. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/62ecdab0-1a1b-4604-bbab-fec9d7771c6d
- author
- Ögren, Anders LU
- organization
- publishing date
- 2019
- type
- Chapter in Book/Report/Conference proceeding
- publication status
- published
- subject
- keywords
- Central banks, Fiscal systems, Monetary theory, Monetary policy, Optimum currency areas
- host publication
- Handbook of the History of Money and Currency
- editor
- Battilossi, Stefano ; Cassis, Youssef and Yago, Kazuhiko
- pages
- 747 - 770
- publisher
- Springer
- external identifiers
-
- scopus:85089631188
- ISBN
- 978-981-10-0622-7
- DOI
- 10.1007/978-981-10-0622-7_28-1
- language
- English
- LU publication?
- yes
- id
- 62ecdab0-1a1b-4604-bbab-fec9d7771c6d
- date added to LUP
- 2019-11-14 11:55:07
- date last changed
- 2022-04-18 19:01:41
@inbook{62ecdab0-1a1b-4604-bbab-fec9d7771c6d,
abstract = {{Currency unions have been a recurring phenomenon in monetary history. The most basic definition of a currency union is when two or more sovereign nations share a common currency. Even though a currency union shares many characteristics with international monetary regimes based on fixed exchange rates (such as the Bretton Wood system), it is the most extreme case of a fixed exchange rate as it also implies sharing a common unit of account between the participating countries. While the economic rationale for currency unions focuses on gains in monetary efficiency from decreasing transaction costs, history shows that political reasons also played a key role. In this chapter, I discuss the theoretical foundations of monetary unions (the so-called optimum currency area theory) and analyze the most important historical cases of currency unification, both domestic (the USA, Germany) and international. Finally I discuss the key lessons we can draw from the history of currency unions and their implications for the Economic and Monetary Union.}},
author = {{Ögren, Anders}},
booktitle = {{Handbook of the History of Money and Currency}},
editor = {{Battilossi, Stefano and Cassis, Youssef and Yago, Kazuhiko}},
isbn = {{978-981-10-0622-7}},
keywords = {{Central banks; Fiscal systems; Monetary theory; Monetary policy; Optimum currency areas}},
language = {{eng}},
pages = {{747--770}},
publisher = {{Springer}},
title = {{Currency Unions}},
url = {{http://dx.doi.org/10.1007/978-981-10-0622-7_28-1}},
doi = {{10.1007/978-981-10-0622-7_28-1}},
year = {{2019}},
}