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Currency unions in prospect and retrospect

Silva, J.M.C. Santos and Tenreyro, Silvana ORCID: 0000-0002-9816-7452 (2010) Currency unions in prospect and retrospect. Annual Review of Economics, 2 (1). pp. 51-74. ISSN 1941-1383

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Identification Number: 10.1146/annurev.economics.102308.124508


We critically review the recent literature on currency unions and discuss the methodological challenges posed by the empirical assessment of their costs and benefits. In the process, we provide evidence on the economic effects of the euro. In particular, and in contrast with estimates of the trade effect of other currency unions, we find that the euro's impact on trade has been close to zero. After reviewing the costs and benefits of joining a currency union, we conclude with some open questions on normative and positive aspects of the theory of currency unions, emphasizing the need for a unified welfare-based framework to weigh their costs and gains.

Item Type: Article
Official URL:
Additional Information: © 2010 Annual Reviews
Divisions: Economics
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
JEL classification: F - International Economics > F3 - International Finance > F31 - Foreign Exchange
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F42 - International Policy Coordination and Transmission
Date Deposited: 23 Feb 2012 16:28
Last Modified: 16 May 2024 01:09

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