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.

The theory of optimum currency areas states that the more two countries trade with each other, the better candidates they are for a currency union. In terms of the endogeneity argument, convergence follows from joining a currency union and the integration process itself turns the countries into optimal currency areas. The potential increase in trade is regarded as one of the most important benefits of a currency union. Indirect evidence from studies on the effect of exchange rate volatility on trade does not support this claim. Rose argues that the common currency effect on trade is separate from the effect of the elimination of exchange rate variability and finds a large positive effect of a currency union on trade. Although his methodology has met with criticism, most studies find a positive estimate. A meta-analysis of the studies confirms that a common currency has a statistically and economically significant trade-creating effect. / Economics / M.Com. (Economics)

This dissertation consists of three independent essays addressing several key issues related to the empirical application of optimum currency area. The first essay explores the features of the CFA franc zone by operationalizing Robert Mundell’s (1952) criteria for an optimum currency area. A vector autoregression method is used in modeling national outputs as determined by global, regional and country-specific shocks. It finds that domestic outputs of the CFA franc zone countries are strongly influenced by country-specific shocks. These results suggest that the CFA franc zone countries are structurally different from each other and the monetary union may have been a costly arrangement for the member countries. The second essay focuses on the Eastern Caribbean Currency Union (ECCU). A 2-vairable vector autoregressive model is estimated to investigate the extent of symmetric shocks in the small open economies of the ECCU. The paper finds that domestic outputs of the ECCU countries are strongly influenced by regional shocks. These results indicate that the ECCU countries are structurally similar to each other and exchange arrangements appear to have well served the region and the group of countries is more likely to be an optimum currency area. The third essay explores the possibility of a currency union in East Asia. In this essay, the extent of global and regional integration in East Asia is investigated using the stock price index as a measure of economic performance. A similar VAR model is employed to separate the underlying shocks into global, regional and country-specific shocks. The estimation results show that country-specific shocks play a dominant role in East Asia although their role appears to have declined over time, especially after the 1997 financial crisis. Global and regional shocks are responsible for small but increasing shares of stock price fluctuations in most countries. The results indicate that, despite years of liberalization and regional integration, economies in East Asia remain dissimilar and are subject to asymmetric shocks and it might be costly for East Asian countries to abandon monetary policy independence to form a monetary union and that a more flexible exchange rate regime might be desirable.

Depuis 1939, une partie des pays de l'Afrique de l'Ouest a pour monnaie le Franc CFA d'Afrique de l'Ouest. Ces pays constituent, de fait, une zone monétaire. La dévaluation du CFA de 1994 marque le passage d'une convertibilité automatique à une convertibilité partielle. Il est alors légitime de s'interroger sur l'optimalité de cette zone monétaire surtout dans un contexte où la Zone Euro connaît elle même des difficultés.Elle a pour ambition de s'interroger sur l'optimalité de la zone monétaire l'Union Economique et Monétaire Ouest-Africaine. L'étude a donc pour objectif d'identifier si cette zone monétaire est une Zone Monétaire Optimale, (ZMO) au sens de MUNDELL (1961). L'objet d'étude soulevé ici portera plus particulièrement sur l'analyse des critères de faisabilité d'une ZMO et le passage à des critères de soutenabilité. Les critères de premier rang d'une ZMO, déterminés par les auteurs précurseurs de littérature sur la question dans les années 1960 et 1970, constitués principalement par les apports de MUNDELL, (1961).Notre travail propose de ne pas se limiter à la définition donnée par MUNDELL, même si cette théorie s'applique à juste titre pour des pays candidats à l'adhésion. Dans ce cas la Loi du Prix Unique permet de caractériser la fixité du taux de change comme étant une condition nécessaire de premier rang. Cette condition de premier ordre est non suffisante pour justifier de la soutenabilité et durabilité d'une zone. La fixité des monnaies est la deuxième condition retenue. La monnaie unique devient alors un choix rationnel qui se justifie par les avantages qu'elle procure aux pays qui l'adoptent. / Ome of the West African countries have adopted the CFA Franc (Franc of African Financial Communities) as their currency in 1939. These countries hence form a monetary zone. The devaluation of the French CFA in 1994 marked the passage from an automatic convertibility to a partial convertibility. It seems legitimate to consider the optimality of the West-African currency area - especially in a context where the Euro zone itself faces difficulties.This thesis aims to identify whether this area is indeed an optimal currency area as defined by MUNDELL in 1961. The object of study raised here will focus more particularly on the analysis of the feasibility of an OCA (Optimum currency area) and on the passage to sustainability criteria. The primary criteria of an OCA -- as determined by the founding authors in the literature of the 1960s and 1970s on the issue, MUNDELL being the main contributor (1961). This study however does not restrict itself solely to the definition given by MUNDELL, even though his theory applies rightly to countries which are candidates to entry into the union. In this case, the Law of one Price (Loop) can characterize the fixity of the exchange rate as a primary necessary condition. This proviso however is not sufficient to justify the sustainability and durability of an area. In case this latter condition is not met, the other condition is the fixity of currencies. The unique currency then becomes a rational choice which is justified by the advantages it procures countries which adopt it.

Made available in DSpace on 2016-04-26T20:48:52Z (GMT). No. of bitstreams: 1 Dissertacao Paulo Boscoli.pdf: 540539 bytes, checksum: 032e8de8b7007486d8846d4f168e8280 (MD5) Previous issue date: 2005-05-20 / Coordenação de Aperfeiçoamento de Pessoal de Nível Superior / This research has objectives like: show the arguments of the Optimum Currency Areas theory, experiences on currency union (their motivations, architecture e consequences), the discussion on a currency union to Mercosul and, last, conclusions from the linkage of these arguments. Our final objective is to verify if a Mercosul´s currency union is viable, desirable and realistic, them to wonder possibilities to Brazil from this monetary arrangement. We justify this work with the importance the integration movements are getting and establishing in recent years, with many agreements and tracts on regional and global scope. All of these movements are presented to Brazil, partially, as the Mercosul. This is the most important agreement (manly because of its achievements) of which Brazil is a member. There for, all the skepticism over Mercosul nowadays can be relaxed and, thus, justify our work. To answer the questions made above, we will be based on a literature review on these issues and we will use some data base (such as the ECLAC statistical yearbook and the on-line data base for European Union, the Eurostat). We will show the arguments from the Optimum Currency Areas theory, from experiences on currency union and from the discussion on a currency union to Mercosul and we will try to establish some links between them. With some auxiliary statistic data, we ll illustrate, confirm or refute arguments from this debate. After it we found out that, generally, the a Mercosul´s currency union is viable, at the planning level since now, in short run, and at the implementation level only when the Mercosul´s countries pass safely through the practical and theorical challenges shown to them. However the option to a currency union way or an autonomous way appears to be a politics matter and should be the beginning of such process / Este trabalho tem como objetivos apresentar os argumentos da teoria das Áreas Monetárias Ótimas, experiências em uniões monetárias (suas motivações, arquitetura e conseqüências), o debate sobre uma união monetária para o Mercosul e, por fim, as conclusões derivadas do cruzamento da argumentação de cada uma dessas apresentações. Nosso objetivo final é o de verificar se uma união monetária para o Mercosul é viável, desejável e realista, além de aventar possibilidades que o Brasil poderia obter em tal arranjo monetário. Nossa justificativa é baseada na importância que os movimentos de integração vêm ganhando e consolidando, com vários tratados e acordos entre países em âmbitos regionais e mundial. Todo esse movimento é apresentado para o Brasil, em parte, na forma do Mercosul. Esse bloco é o acordo de integração mais ambicioso (nas suas conquistas, principalmente) que o Brasil participa. É dessa forma que todo o ceticismo que cerca hoje em dia esse bloco econômico pode ser relativizado e, por tanto, justificar nosso estudo. Para respondermos às questões anteriores, nos apoiaremos na revisão bibliográfica desses temas e usaremos bancos de dados (como o Anuário Estatístico da CEPAL e o banco de dados on-line sobre a União Européia, o Eurostat). Apresentaremos os argumentos da teoria das Áreas Monetárias Ótimas, das experiências de uniões monetárias e do debate para o Mercosul, faremos a sua sobreposição, com o intuito de constatar conexões e contradições. Com o auxílio de alguns dados estatísticos, ilustraremos, validaremos ou refutaremos alguns argumentos desse debate. Por fim, constatamos, de maneira geral, que uma união monetária para o Mercosul é viável em seu planejamento desde já, no curto prazo, e, em sua implementação, somente quando os países integrantes tiverem, satisfatoriamente, ultrapassado os desafios práticos e teóricos que se apresentam, sendo que a opção por uma união monetária ou um caminho autônomo de políticas monetárias, parece ser uma opção política e deve ser o início de tal processo

The aim of the thesis is to evaluate the stability of the euro area in the context of the impact of the economic crisis. The work is divided into three chapters. The theory of optimum currency area was identified as a fundamental theoretical basis for subsequent analysis, and then Ireland and Portugal were chosen as the two countries representing vulnerable economies, which have been subjected to more detailed examination and comparison. These two parts were for the coherence of the whole work set in the historical context of European monetary integration. The first part deals with a theory of optimal currency area. The first chapter is further analysis of potential benefits and costs of the monetary area. The second chapter focuses on the historical context of monetary integration in Europe and recent developments in euro area countries. The theme of the third chapter is to compare the impact of the crisis on the Irish and the Portuguese economy. This chapter focuses on the main causes of the crisis in Ireland and then in Portugal, the impact of the crisis on them and stability restoring program adopted in the context of drawing loans from the European Commission, ECB and IMF. In the last part of the third chapter the causes and effects of the crisis in Ireland and Portugal were mutually compared. The conclusion of this chapter is devoted to the prospects of these countries into the future.

Syftet är att undersöka om Sverige tillsammans med ett eller flera av de nordiska länderna kan utgöra en optimal valutaunion. Utifrån ett svenskt perspektiv visar resultaten att det är lämpligast för Sverige att ingå i en valutaunion med Norge och Danmark eftersom den ekonomiska integrationen mellan dessa länder har varit störst. Taylors ränteregel visar att Sverige och Norges räntebanor samvarier mest och Optimal currency area-index (OCA-index) visar att Sverige, Danmark och Norge präglas av störst ekonomisk integration. Vi har använt två olika metoder för att undersöka en optimal nordisk valutaunion utifrån ett svenskt perspektiv, OCA-index och Taylors ränteregel. De båda tillvägagångssätten fokuserar på hur ekonomiskt integrerade länderna är, men genom olika variabler och ekonomiska storheter. Ett OCA-index har skapats och skattningen visar att variabeln som beskriver konjunkturcykeln är den som har störst inverkan på den beroende variabeln, växelkursvolatilitet. För att undersöka hur de nordiska länderna har påverkats av chocker har taylor-räntor beräknats och skillnader i korrelation har analyserats. Analysen visar på svårigheter i att mäta ekonomisk integration, något som OCA-teorin hävdar är viktigt för en optimal valutaunion. Beroende på vilken utgångspunkt som väljs varierar resultatet för vilket land Sverige skulle kunna bilda en optimal valutaunion med. Resultaten skiljer sig från tidigare forskning, delvis i tolkningen av variabeln för exportsektorsammansättning och delvis på grund av den studerade tidsperioden. / The aim is to investigate if Sweden constitutes a possible optimal currency area with one or more of the Nordic countries. The results show that Norway and Denmark are the two most suitable partners to join Sweden in a currency union since the economic integration between these countries is the strongest. The Taylor interest rate rule indicates that the interest rate paths between Sweden and Norway correlate the most. The variables in the optimal currency area-index (OCA-index) show that it is Sweden, Denmark and Norway that enjoys the strongest economic integration and therefore constitutes a possible optimal currency area. Two different methods have been used to investigate the possibility of an optimal currency area; the OCA-index and the Taylor interest rate rule. Both methods focus on the level of economic integration between the countries but do this by assessing different economic variables. The OCA-index has been compiled and the estimation indicates that the variable describing the business cycle has the greatest impact on the dependent variable, exchange rate volatility. In order to examine how the Nordic countries have been affected by shocks, Taylor interest rates have been calculated and differences in correlation have been examined. The conducted analysis points toward difficulties measuring economic integration, which according to the OCA-theory is important for an optimal currency union. There are several consistencies between the results of the two methods but also important differences such as which country would be the best partner in a currency union with Sweden. The findings differ from earlier scientific results mostly regarding the interpretation of the variable describing the export sectorial composition and the considered time period.

In the 2003 Treaty of Accession, the signatories agreed that all New Member States (NMS) that joined the European Union (EU) in 2004, would adopt the euro, even if no timetable was provided. Why have some NMS not been able to join the euro area even if they made serious attempts at the outset? What are the circumstances and policies in these countries that have led them not yet to adopt the euro? Has it been lack of political will on the part of the government, a strong voice in the opposition, a euroskeptic president, insufficient administrative capacity, or lack of policy learning? Though there is no consensus among economists as to whether or not adopting the euro in the short run is a good idea, an economic cost-benefit analysis would suggest that in the long run euro adoption is positive for NMS. Yet, macroeconomic analyses cannot explain the change in government policies that may lead to euro adoption. Political scientists have typically focused on collective identity, policy learning, ideas and knowledge transfer among central bankers and other political elites, as well as adjustment to global pressures and Europeanization. This political science literature is unable to provide a satisfactory explanation as to why the Czech Republic, Hungary and Poland have not adopted the euro yet. I argue that the role of domestic politics is key to explaining the process of euro adoption in Czech Republic, Hungary and Poland: government policies, elections, electoral cycles as well as constitutional rules, veto points, central banks, public opinion and the media turn out to be crucial in explaining the lagging euro adoption process in these countries. / Graduate

Στην παρούσα εργασία επιχειρούμε να διερευνήσουμε το βαθμό στον οποίο οι οικονομικοί κύκλοι μεταξύ των χωρών-μελών στη διευρυμένη Ευρωπαϊκή Ένωση των 25 χωρών εμφανίζονται ή όχι συγχρονισμένοι και επιπλέον εξετάζουμε την πιθανότητα ύπαρξης ασυμμετριών. Το θεωρητικό πλαίσιο της ανάλυσής μας στηρίζεται στη Θεωρία της Άριστης Νομισματικής Περιοχής, στην οποία αναφερόμαστε εκτενώς, παρουσιάζοντας τόσο την παραδοσιακή όσο και τη σύγχρονη προσέγγισή της, ενώ παράλληλα θίγουμε και το ζήτημα της ενδογένειας των κριτηρίων. Στη συνέχεια, παραθέτουμε αναλυτικά ένα σημαντικό μέρος της σύγχρονης εμπειρικής βιβλιογραφίας που εξετάζει το ζήτημα που μας απασχολεί, ενώ παρουσιάζουμε και ορισμένες από τις μεθοδολογικές προσεγγίσεις που έχουν υιοθετηθεί από τους ερευνητές. Στο υπόδειγμα που αναπτύσσουμε, χρησιμοποιούμε στοιχεία χρονολογικών σειρών που αφορούν σε δυο μακροοικονομικές μεταβλητές, το πραγματικό ΑΕΠ και το επίπεδο τιμών και διερευνούμε σε πρώτη φάση το βαθμό συγχρονισμού των οικονομικών κύκλων στην ΕΕ-25. Ως σημείο αναφοράς ορίζουμε τις 15 χώρες-μέλη της Ευρωπαϊκής Ένωσης (ΕΕ-15), ενώ στο δείγμα μας μεταξύ των υπόλοιπων χωρών συμπεριλαμβάνουμε και τις υποψήφιες για ένταξη στην ΕΕ χώρες. Στόχος μας είναι να προσδιορίσουμε την έκταση στην οποία η πραγματική οικονομική δραστηριότητα σε κάθε μία από τις χώρες αυτές κινείται ή όχι προς την ίδια κατεύθυνση με την ΕΕ-15. Αναλογιζόμενοι τους μηχανισμούς μέσω των οποίων μπορεί να προκαλείται αυτή η κυκλική συσχέτιση, προχωρούμε την ανάλυσή μας ένα βήμα πιο πέρα και εξετάζουμε την πιθανότητα ύπαρξης ασυμμετριών στις διαταραχές. Ακολουθώντας τη μεθοδολογία SVAR, εκτιμούμε για κάθε μία χώρα τα σχετικά υποδείγματα, επιδιώκοντας αρχικά να αναγνωρίσουμε τις διαρθρωτικές διαταραχές με τις οποίες έρχονται αντιμέτωπες οι εξεταζόμενες οικονομίες. Στη συνέχεια, υπολογίζουμε το βαθμό της συμμετρίας που παρουσιάζουν οι διαταραχές συνολικής ζήτησης και συνολικής προσφοράς ξεχωριστά για κάθε μία χώρα σε σχέση με τις αντίστοιχες διαταραχές στην ΕΕ-15. Όσον αφορά στα αποτελέσματα της ανάλυσής μας, εστιάζουμε κυρίως στη συμπεριφορά που επιδεικνύουν τόσο τα νέα κράτη-μέλη όσο και οι υποψήφιες χώρες, ενώ επιχειρούμε και μια πρόβλεψη για το τι μέλλει γενέσθαι σε σχέση με την πολυσυζητημένη ευρωπαϊκή διεύρυνση. / This paper seeks to explore the extent to which economic cycles between member states in the enlarged European Union of 25 countries appear or not synchronized and further examines the possible existence of asymmetries. The theoretical framework of our analysis is based on the Theory of Optimum Currency Area, to which we refer extensively, presenting both traditional and modern approach, while addressing the question of endogeneity criteria. Then, we present in detail an important part of modern empirical literature examining the issue before us, while also highlighting some of the methodological approaches adopted by researchers. In our model we use time-series data related to two macroeconomic variables, real GDP and price level and explore initially the degree of synchronization between business cycles in EU-25. As a point of reference we define the 15 member countries of the European Union (EU-15), whereas in our sample among the remaining countries we include the candidate countries for EU membership. Our goal is to determine the extent to which real economic activity in each of these countries is moving or not in the same direction with the EU-15. Considering the mechanisms by which this cyclic correlation can be caused, we proceed our analysis a step further and examine the possible existence of asymmetries in shocks. Following the SVAR methodology, we estimate for each country relevant models, seeking initially to identify the structural shocks experienced by the economies concerned. Then, we calculate the degree of symmetry of aggregate demand and aggregate supply shocks separately for each country in relation to the respective shocks in the EU-15. Regarding the results of our analysis, we focus mainly on the behaviour shown by both the new member states and candidate countries, while attempting a prediction about what happens next in relation to the much-discussed EU enlargement.

Η παρούσα εργασία επικεντρώνεται στην αποτίμηση της μακροοικονομικής ετερογένειας μεταξύ Ευρωπαϊκών και μη Ευρωπαϊκών χωρών και στο να εκτιμήσει το κατά πόσο ο συγχρονισμός των οικονομικών κύκλων έχει μεταβληθεί με το χρόνο. Η μεθοδολογία είναι δομημένη με το εξής τρόπο. Πρώτον, συγκρίνουμε τις συσχετίσεις μεταξύ των χωρών για δύο περιόδους και δεύτερον, συγκρίνουμε τις τιμές του συντελεστή ανισότητας Theil για να σκιαγραφήσουμε την ετερογένεια μεταξύ αυτών των δύο περιόδων. Τέλος, παλινδρομούμε διάφορες μεταβλητές έτσι ώστε να καταλήξουμε ποιοι παράγοντες επιδρούν στον συσχετισμό και ποιοι επηρεάζουν την μείωση της ετερογένειας μεταξύ των χωρών που εξετάζουμε. / This paper focuses on assessing the macroeconomic heterogeneity among European and non European Countries and to account how does business cycle synchronization has changed over time. The methodology is structured in the following manner. First, we compare the correlations between the countries among two periods and second, we compare the values of the Theil Inequality coefficient to outline the heterogeneity between this two periods. Finally, we regress differently variables so as to conclude which factors affect the correlation and which affect the reduction of the heterogeneity among the countries we examine.