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Article: Mundell revisited: A simple approach to the costs and benefits of a single currency area

TitleMundell revisited: A simple approach to the costs and benefits of a single currency area
Authors
Issue Date2003
PublisherBlackwell Publishing Ltd. The Journal's web site is located at http://www.blackwellpublishing.com/journal.asp?ref=0965-7576&site=1
Citation
Review Of International Economics, 2003, v. 11 n. 4, p. 674-691 How to Cite?
AbstractThe paper evaluates the costs and benefits of a single currency area within a unified framework. Conventionally, it is argued that a single currency area carries a welfare loss owing to the sacrifice of exchange rate adjustment in the presence of country-specific shocks. But in 1973 Mundell argued that a single currency area offers risk-sharing benefits when capital markets are limited in their ability to facilitate consumption insurance.The authors construct a simple model and compare a system of independent national currencies to a single currency area. The presence of country-specific shocks may either reduce or enhance the benefits of a single currency area, depending on the importance of exchange rate adjustment relative to risk-sharing. In a simple quantitative analysis, we find that either regime may dominate, although the utility differences between the two regimes are very small.
Persistent Identifierhttp://hdl.handle.net/10722/85699
ISSN
2015 Impact Factor: 0.558
2015 SCImago Journal Rankings: 0.518
References

 

DC FieldValueLanguage
dc.contributor.authorChing, Sen_HK
dc.contributor.authorDevereux, MBen_HK
dc.date.accessioned2010-09-06T09:08:10Z-
dc.date.available2010-09-06T09:08:10Z-
dc.date.issued2003en_HK
dc.identifier.citationReview Of International Economics, 2003, v. 11 n. 4, p. 674-691en_HK
dc.identifier.issn0965-7576en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85699-
dc.description.abstractThe paper evaluates the costs and benefits of a single currency area within a unified framework. Conventionally, it is argued that a single currency area carries a welfare loss owing to the sacrifice of exchange rate adjustment in the presence of country-specific shocks. But in 1973 Mundell argued that a single currency area offers risk-sharing benefits when capital markets are limited in their ability to facilitate consumption insurance.The authors construct a simple model and compare a system of independent national currencies to a single currency area. The presence of country-specific shocks may either reduce or enhance the benefits of a single currency area, depending on the importance of exchange rate adjustment relative to risk-sharing. In a simple quantitative analysis, we find that either regime may dominate, although the utility differences between the two regimes are very small.en_HK
dc.languageengen_HK
dc.publisherBlackwell Publishing Ltd. The Journal's web site is located at http://www.blackwellpublishing.com/journal.asp?ref=0965-7576&site=1en_HK
dc.relation.ispartofReview of International Economicsen_HK
dc.rightsReview of International Economics. Copyright © Blackwell Publishing Ltd.en_HK
dc.titleMundell revisited: A simple approach to the costs and benefits of a single currency areaen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0965-7576&volume=11 &issue=4&spage=674&epage=691&date=2003&atitle=Mundell+Revisited:+A+Simple+Approach+to+the+Costs+and+Benefits+of+a+Single+Currency+Areaen_HK
dc.identifier.emailChing, S: steve.ching@hku.hken_HK
dc.identifier.authorityChing, S=rp01056en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1111/1467-9396.00410-
dc.identifier.scopuseid_2-s2.0-0142059674en_HK
dc.identifier.hkuros94273en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0142059674&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume11en_HK
dc.identifier.issue4en_HK
dc.identifier.spage674en_HK
dc.identifier.epage691en_HK
dc.publisher.placeUnited Kingdomen_HK
dc.identifier.scopusauthoridChing, S=16411142700en_HK
dc.identifier.scopusauthoridDevereux, MB=7007064657en_HK

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