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The purpose of this thesis is to carry out an empirical investigation into whether membership of monetary union matter in the determination of bank net interest margin. Bank net interest margin is the difference in bank borrowing and lending rates relative to the total interest-earning assets. We operationalise this study by comparing panels of commercial banks within and outside economic and monetary unions in Europe and Sub-Saharan Africa. For our European analysis we use bank-level data from nine Euro Area countries and seven non-Euro Area economies, in a dynamic empirical model, employing Arellano and Bover (1995)/Blundell and Bond (1998) system GMM estimation method. We find that stronger competition and efficiency, as well as greater macroeconomic stability in the Euro Area reduce bank net interest margins more than in the non-Euro Area. We attribute this to the well-developed single market with a strong socio-economic cohesion underpinning rather than the economic and monetary union. We extend the same level of analysis to the Sub-Saharan Africa, where we contrast our findings in the West African Economic and Monetary Union (WAEMU) with those of twenty non-monetary union Sub-Saharan African economies. Our findings in the Sub-Saharan African context reveal a rather different scenario. While the WAEMU enjoys relatively lower net interest margins than its non-monetary union counterparts, this is attributable to the union’s ability to pursue vigorously its primary objective of maintaining price stability by maintaining lower interest rates. Unlike in the Euro Area we do not observe a reducing impact of bank competition and efficiency on bank net interest margin in the West African Economic and Monetary Union (WAEMU) as we do in the non-monetary union Sub-Saharan Africa. We find these results for the Sub-Saharan African analysis puzzling, and attribute it to the absence of a well-developed single/common market which is supposed to drive competition and efficiency with the effect of reducing net interest margins, as it obtains in the Euro Area. Our conclusion is that it is rather the presence of a well-developed single market that engenders competition and efficiency effects to reduce bank net interest margins rather than membership of a monetary union per se.

This work summarizes readiness of the Czech Republic for addoption of common currency euro. It describes the history of common European currency in the first chapter and economic and monetary union in second chapter. The fourth chapter analyzes the fulfillment of Maastricht convergence criteria in the Czech Republic in comparison to Slovenia. The last chapter focuses on the fulfillment of the optimum currency area criteria in these countries

The dissertation is mainly made up of three empirical theses on the Optimum Currency Area theory, business cycle synchronization, and intra-industry trade. The second chapter conducts an empirical test into the theory of Optimum Currency Area. I investigate the feasibility of creating a currency union in East Asia by examining the dominance and symmetry of macroeconomic shocks. Relying on a series of structural Vector Autoregressive models with long-run and block exogeneity restrictions, I identify a variety of macroeconomic disturbances in eleven East Asian economies. To examine the nature of the disturbances, I look into the forecast error variance decomposition, correlation of disturbances, size of shocks, and speed of adjustments. Based on both statistical analysis and economic comparison, it is found that two groups of economies are subject to dominant and symmetrical domestic supply shocks, and that the two groups respond quickly to moderate-sized shocks. Therefore, it is economically feasible for the two groups of economies to foster common currency zones. The third chapter investigates the different effects of intra- and inter-industry trade on business cycle synchronization, controlling for financial market linkage and monetary policy making. The chapter is the first attempt to use intra- and inter-industry trade simultaneously in Instrument Variable estimations. The evidence in my paper is supportive that intra-industry trade increases business cycle synchronization, while inter-industry trade brings about divergence of cycles. The findings imply that country pairs with higher intra-industry trade intensity are more likely to experience synchronized business cycles and are more feasible to join a monetary union. My results also show that financial integration and monetary policy coordination provide no explanation for synchronization when industry-level trade are accounted for. The fourth chapter extends the third chapter and explores how the characteristics of global trade network influence intra-industry trade. Borrowing the concept of structural equivalence, the similarity of two countries’ aggregate trade relations with other countries, from the social network analysis, this study incorporates this measure of trade network to the augmented gravity model of intra-industry trade. I build up two fixed effects models to analyze intra-industry trade in the raw material and final product sectors among 182 countries from 1962 through 2000. Structural equivalence promotes intra-industry trade flows in the final product sector, but it does not influence intra-industry trade in the crude material sector. Moreover, structural equivalence has been increasingly important in boosting intra-industry trade over time. / Graduate / 0508

The goal of the thesis is to propose an opinion regarding the accession to the eurozone supported by the analysis of the related benefits and constraints in connection with the current economic and political situation. Allowing to get an idea of what the benefits and downsides of euro adoption would be for them, the gathering of information and arguments suitable for entrepreneurs, managers and citizens is the sought outcome of the work. The issue was analysed both quantitatively and qualitatively with the help of the SWOT analysis, optimum currency area theory and analysis of macroeconomic indicators. To achieve a more comprehensive understanding, also political programmes of the political parties represented in the Chamber of Deputies of the Czech Parliament were analysed. The contribution of the thesis lies in providing a comprehensive insight into issues regarding the euro while assessing the current situation and indicating the closest possible date for euro adoption.

Diploma thesis, European Monetary Union, its Development and the Future, deals with the reasons, which ultimately led to the foundation of the later European Union and afterwards the European Monetary Union. The journey, which leads up to the present where we are now, lasted for several decades. The experience with the two World Wars on the European territory was the sufficient reason why the European countries embarked on this common journey. In the first part this thesis offers the insight into the past. In short, the most important historical milestones on this road, leading towards the European, respectively the European Monetary Union, are suggested here. The second part of this thesis focuses on current problems of the European Monetary Union. The individual European macroeconomic indicators are compared with the results obtained overseas, particularly in the U.S.A. and Japan. Ultimately, it appears that the EU in comparison especially with the U.S.A. is lagging behind in some indicators. Another part of the thesis is dedicated to the optimum currency area. Is therefore the European Monetary Union the optimum currency area? A few indicators give again the answer to this question. The resulting values of the indicators show that the European Monetary Union is not the optimum currency area today. The reasons can be found particularly in the political than the economic area. Therefore, there is lots of work waiting for the European politicians, officials, but also ordinary citizens, and it will be only up to them, which way the European Union sets out.

The introduction of euro in 2002 was considered to be a risky "experiment. Even before its actual existence, many economists have doubted the success of the Economic Monetary Union (EMU) emphasizing the potential costs of such a bold action. The traditional Optimum Currency Area by Mundell (1961), Mc Kinnon (1963) and Kenen (1969) has pointed out the loss of the exchange-rate mechanism and the structural differences among the member states as the main sources of costs within a monetary union. Ten years after the circulation of euro, the ongoing Greek debt crisis has revealed the imperfections of the EMU. Greece has become the "black sheep" of the union, having accumulated unsustainable levels of public debt and deficits that could pose a threat for the future of the Eurozone. It is widely believed that the profligate fiscal policies of the Greek government and the domestic flaws of the Greek economy have played an importan role on the country's debt crisis. However, the impact of Greece's accession to the EMU on the current crisis is still a moot question.