Object

Title: The theory of an ‘optimum currency area’

PLMET:

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Title:

The theory of an ‘optimum currency area’

Creator:

Kundera, Jarosław

ORCID:

0000-0003-0900-7447

Subject and Keywords:

Optimum Currency Area   currency   current crisis   euro zone  
kryzys walutowy   Optymalny Obszar Walutowy   waluta   strefa Euro

Abstract:

The main goal of this paper is to analyse and distinguish the main components of the theory of an ‘Optimum Currency Area’. The theory of an optimum currency area indicates some essential elements as preconditions for the successful introduction of a common currency: high mobility of labour, openness of the economy defined as a high proportion of tradable to non-tradable goods, and high diversification of domestic production before joining the union. The article’s analysis helps to better understanding the reasons of the current crisis in the euro zone. The main problem with a common currency area is the adjustment to imbalances, which cannot take place through exchange rates in conditions of a common currency. The missing elements of the theory are the role of the mobility of capital to correct interregional balance of payments disequilibria and lack of a common budget with sufficient own resources during the occurrence of debt crises in member countries. The theory of an optimum currency area has noticed the importance of coordination between fiscal and monetary policy and the necessity of redistribution of resources among partners. However, it does not say much about the methods applied, how to deal with debt crises and what the cost of a potential breaking up of monetary union would be.

Place of publishing:

Wrocław

Publisher:

University of Wroclaw. Faculty of Law, Administration & Economics

Contributor:

Kozłowski, Artur. Editor-in-Chief

Date issued:

2012

Resource Type:

text  
tekst

Detailed Type:

article  
artykuł

Identifier:

oai:repozytorium.uni.wroc.pl:131267   eISSN 2084-1264

DOI:

10.2478/wrlae-2013-0007

Language:

eng

Abstract Language :

eng

Relation:

Wroclaw Review of Law, Administration & Economics, vol.2, no.2, 2014, pp.1-28

Is version of:

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Access rights:

Attribution  
Uznanie autorstwa

License:

Creative Commons - Attribution (CC BY 4.0)  
Creative Commons - Uznanie autorstwa (CC BY 4.0)

Rights holder:

Copyright by Wroclaw Review of Law, Administration & Economics, published by Sciendo

Autor opisu:

WR U/PAdbg

Object collections:

Last modified:

Oct 25, 2021

In our library since:

Oct 25, 2021

Number of object content hits:

81

Number of object content views in PDF format

87

All available object's versions:

https://repozytorium.uni.wroc.pl/publication/141972

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The theory of an ‘optimum currency area’ Oct 25, 2021

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