Theory of Optimum Currency Areas and the Common European Currency
Abstract
The article considers problems of the Euro on the basis of the optimum currency areas theory. As it is known, theory of the optimum currency areas proposed by R. Mundell was built on mobility of production factors between countries within the zone and fixed common currency exchange rate. The author believes that the current crisis phenomena related to European currency have their roots in the theoretical concept of common currency rather than in debt problems in Europe. Use of the common currency with a fi xed exchange rate in the countries with diff erent levels of development leads not to deeper integration, but, on the contrary, to more diff erentiation between European countries. The publication proposes possible economic measures that would help the Euro to overcome the crisis. Refs 33.
Keywords:
Euro, common currency, exchange rate, Euro-zone, optimum currency areas
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Articles of the St Petersburg University Journal of Economic Studies are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.