Abstract

This paper characterizes the integration patterns of international currency unions (such as the CFA Franc Zone). We empirically explore different features of currency unions, and compare them to countries with sovereign monies by examining the criteria for MundellÕs concept of an optimum currency area. We find that members of currency unions are more integrated than countries with their own currencies. For instance, we find that currency union members have more trade and less volatile real exchange rates than countries with their own monies; business cycles are more highly synchronized across currency union countries than across countries with sovereign monies.

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Additional Information

ISSN
1538-4616
Print ISSN
0022-2879
Pages
pp. 1067-1089
Launched on MUSE
2002-11-01
Open Access
No
Archive Status
Archived 2007
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