Optimum Currency Areas

Robert Mundell (1961) framed the fixed-versus-flexible exchange rate controversy in a novel way when he focused attention on currency areas and the ingredients necessary for a group of nations to form an optimal currency area (OCA). This paper proposes an analogous theory for cryptocurrencies, called optimal currency scope (OCS), and explains the conditions necessary for an OCS to exist. In contrast to an OCA, which is defined by its non-overlapping geographic areas, an OCS is defined by its multiple-overlapping attributes and the needs they solve, which we call scope. Scopes are not geographic and have fuzzy boundaries; so, the possibility of competing currencies in a single scope needs to be considered. The central issues surrounding an OCS are the optimal number and magnitude of currency attributes, rather than whether nations should adopt fixed versus fluctuating exchange rates. Similar to the findings since Mundell first introduced his OCA Theory, we find that the optimum number of cryptocurrency attributes and, therefore, the optimal number of cryptocurrencies must be determined empirically rather than theoretically. 

A copy of the published version of this article may be downloaded at https://www-tandfonline-com.ezproxy.babson.edu/eprint/WDQSCQGCXEHXUQ4S5AFT/full?target=10.1080/10438599.2019.1687395.

Currently, there is a need for reform of global monetary circulation and credit, which in a sense has stalled. The key is to restore the connection between monetary circulation and real production. In the first part of this study, I provide a brief analysis of the catastrophic consequences that the current design of reserve currencies has led to for the world economy. At the same time, the transition from the dollar to other reserve currencies operating on the same principles, the ethos of which is now being actively promoted in the West, will not improve the situation. In the second part, I demonstrate the efforts being made to de-dollarize settlements by both the BRICS, the EU, and the EAEU countries. The third part shows the successful historical experience of the transferable ruble as an international currency that functioned in 1960-1980 on non-discriminatory principles within the Council for Mutual Economic Assistance (CMEA). In the fourth part, the international currencies already functioning in the world are described, as well as some existing proposals for the introduction of new international currencies. I argue that reliable physical access to reserves in basic food and medicines in controlled warehouses is becoming a matter of great importance. The transition is necessary from the ideology of reserve currencies to the ideology of reserves of critical goods. Such an incentive of a new BRICS currency on the demand side will be food and healthcare security. On the supply side, for all states that have established a currency, there should be a clear vision of how they can develop their exports using this currency. In order to secure currency, such goods must be pledged to international BRICS warehouses that correspond to the main export directions of the project countries and/or are critical for their import. These are basic foods such as grains, then medicines, fuel and energy resources, and metals.

This paper presents a second law analysis for the optimal geometry of fin array by forced convection. The analytical analysis involves the achievement of a balance between the entropy generation due to heat transfer and entropy generation due to fluid friction. In the design of a thermal system, it is important to minimize thermal irreversibilities because the optimal geometry will be found when the entropy generation rate is minimized. In this paper, the entropy generation rate is discussed and optimum thickness for fin array is determined on the basis of entropy generation minimization subjected to the global constraint. In addition, the influence of cost parameters on the optimum thickness of fin array is also considered and presented in graphical form. It has been found that the increase in cross flow fluid velocity will enhance the heat transfer rate that will reduce the heat transfer irreversibility.

В данной монографии делается анализ социально-экономических проблем и вызовов с которыми столкнулся Кыргызстан с точки зрения выбора валютного режима. Как денежная система во главе с Национальным банком влияет на развитие экономики и жизнь граждан. Как граждане страны расплачиваются за системные ошибки денежной системы, и каким образом выбор денежной системы программирует экономическую модель развития. Автор предлагает новую концепцию валютного режима, основанного на золотовалютном стандарте.

The new designs for the US Paper Money between 1914 and 1918: Federal Reserve Notes and Federal Reserve Bank Notes during the Word War I. Contents:
BEFORE THE FED, THE FED, THE NEW NOTES, 12 BANK SEALS, THE NEW TRADITION, 2 TREASURY SEALS, DATES, FIVE-DOLLAR BILL, TEN-DOLLAR BILL, TWENTY-DOLLAR BILL, FIFTY-DOLLAR BILL, ONE HUNDRED-DOLLAR BILL, ONE-DOLLAR BILL, TWO-DOLLAR BILL, $500 BILL, $1,000 BILL, $5,000 BILL, $10,000 BILL, 4 AUTHORIZATIONS ON THE “FED” PAPER MONEY (1914-1918), FINAL WORDS.

La teoria delle Aree Valutarie Ottimali (AVO, in inglese “Optimum Currency Area”) sta vivendo una notorietà particolarmente elevata dallo scoppio della crisi dell'euro. Economisti di diverse estrazioni, e numerosi studi dei maggiori organismi internazionali, hanno individuato nell'eurozona un'“area valutaria pessima” e spiegato in questo modo la tendenza al collasso della moneta unica europea. Eppure, a ben vedere, la teoria delle AVO non sembra convincente circa le difficoltà dell'euro.

Nell'articolo che proponiamo (scarica il PDF) partiamo mostrando che la teoria si basa sui presupposti del paradigma teorico neoclassico: le preferenze del consumatore, la dotazione dei fattori produttivi, l'esistenza di un tasso “naturale” di interesse che equilibra investimenti e risparmi, la teoria quantitativa della moneta. Non sorprende quindi che le politiche che ne discendono siano in larga parte basate su una modifica delle condizioni dell'offerta: mobilità del fattore lavoro (cioè l'emigrazione dei disoccupati da una regione depressa) e del capitale, flessibilità salariale, maggiore concorrenza per indurre l'abbassamento dei costi.

Esaminando i "criteri" in base ai quali un'area valutaria può considerarsi ottimale, mostriamo che essi non sembrano dare una spiegazione convincente della crisi dell'euro. Rifacendoci alla letteratura, mainstream ed eterodossa, evidenziamo la contraddittorietà di tali criteri sia rispetto a quanto avvenuto nell'eurozona, sia in una situazione teorica. In particolare ci concentriamo sulla mobilità delle merci e dei capitali, che può produrre maggiori divergenze tra le regioni di un'area valutaria, e sulla mobilità del fattore lavoro, ritenuta dalla teoria AVO un elemento riequilibrante. Al contrario, mostriamo che il "rimedio" dell'emigrazione dei disoccupati da una regione in crisi verso le regioni più forti, non determina necessariamente un riequilibrio ma al contrario può esacerbare le divergenze pregresse.

La conclusione della nostra argomentazione è che l'unico "criterio" determinante per la stabilità di un'area valutaria è la presenza di uno Stato con un largo bilancio pubblico e una banca centrale prestatrice di ultima istanza e "garante" del debito pubblico (esattamente ciò che manca all'eurozona). Questo "criterio" determinante è stato diluito in un insieme di altri presupposti, in larga parte irrilevanti o persino contraddittori. Ne risulta che la teoria delle AVO, che si consideri la sua formulazione originaria o la sua evoluzione "endogena", non appare in grado né di spiegare la crisi dell'euro né di indicare una soluzione.

Cette étude analyse, dans une perspective dynamique, la pertinence de l'hétérogénéité des chocs et l'asymétrie des cycles en tant qu'obstacles économiques à la monnaie unique de la CEDEAO. L'étude couvre en plus de la CEDEAO, la ZMAO et trois unions monétaires (UEME, UEMOA et la CEMAC) en vue d'effectuer une analyse comparative. Les résultats de nos estimations à partir de la méthode des variables instrumentales (VI) en panel sont riches d'enseignements. D'une part, ils ont mis en lumière le phénomène d'endogénéité à la Frankel et Rose dans la CEDEAO, l'UEMOA et l'UEME. D'autre part, nos résultats montrent que contrairement à la zone UEME, il n'y a aucune évidence de convergence cyclique dans la CEDEAO après trente-cinq (35) années de libre-échange et dans l'UEMOA et la CEMAC après cinquante (50) années de monnaie unique. Les cycles semblent diverger dans la ZMAO. Dès lors, les hypothèses d'optimalité progressive et d'endogénéité des critères d'une ZMO ne sont pas soutenables ex-ante pour la CEDEAO et la ZMAO. Ces résultats donnent lieu à des recommandations de politique économique. Par ailleurs, franchissant les limites actuelles de l'analyse de l'endogénéité des ZMO, l'étude démontre que la seule relation positive entre la symétrie des cycles et l'intensité commerciale n'est pas suffisante pour soutenir l'hypothèse d'endogénéité des ZMO. Une convergence cyclique ex-ante en plus de cette relation positive rendrait la thèse d'endogénéité plus vraisemblable.

Social media, e-commerce, global peer-to-peer technologies, and the near ubiquity of computers and smartphones allow people to interact, trust, and exchange value across traditional socio-economic control boundaries and over significant distances.  Since the creation in 2008 of a new cryptographic currency system called Bitcoin, a financial technology market sector of about 250 billion USD has rapidly emerged, raising questions about the nature of currency in society and whether new types of non-national money are warranted and viable.  This debate has pitted heterodox economic interests against orthodox economic interests while it has rekindled interest in theories that view money as a social construct with a multitude of potential forms beyond ‘state’ or fiat money, and in forms that are increasingly predicted to be purely digital in the future.  This study seeks to explain the policy, social, and economic factors that underlie perceptions and usage of these new currency types.  First, I develop a novel theoretical matrix of trust and control to explain the conditions under which people choose to use any monetary system.  Then, I test this theory with a quantitative analysis of policy, trust, socio-economic, and cultural factors affecting the perceptions and usage of the new currency systems of Bitcoin and other cryptocurrencies in 28 countries.  This analysis draws on usage metrics recorded from the Bitcoin and cryptocurrency network systems, attitudinal data from the World Values Survey (WVS) and European Values Study (EVS), and a proprietary survey of Bitcoin and cryptocurrency perceptions and usage in 15 countries conducted by Ipsos for the behavioral economics research department at ING Group.  I performed principal component analyses (PCA) to reduce factors among collected metrics, and I then integrated the findings of the PCA into a series of ordinary least squares (OLS) regressions along three primary vectors: trust, control, and culture.  Based on my empirical findings, I group these new currency system users’ personality perspectives into four categories: Evangelists, Pragmatists, Skeptics, and Speculators.  The analysis finds Bitcoin and cryptocurrency perceptions and usage are not correlated with the strictness or laxness of public policies concerning Bitcoin and cryptocurrencies.  The analysis also finds Bitcoin interest as measured by Google Search Trends is not correlated to Bitcoin and cryptocurrency perceptions and usage but is correlated to several lower socio-economic metrics related to crime and lack of confidence in law enforcement and government control.  There is more favorable perception and usage of Bitcoin and cryptocurrency in countries with less developed socio-economic profiles, and less favorable perceptions and usage in countries with more developed socio-economic profiles.  There is more favorable perception and usage of Bitcoin and cryptocurrency in countries with aggregate lower generalized trust and lower democratic tendencies, and less favorable perceptions and usage in countries with aggregate higher generalized trust and higher democratic tendencies.  Overall, the findings show the extent to which trends in usage and perception of the emergent currencies of Bitcoin and other cryptocurrencies are associated with basic cultural and attitudinal tendencies that are not necessarily related to public policy or other typical monetary theory-based controls.  I conclude that a matrix of trust and control is effective at demonstrating how sociological factors explain the landscape of historical, extant, and emergent currency systems and this matrix predicts where Bitcoin and cryptocurrencies situate in society relative to these other currency systems.

In the context of the theory of the optimum currency areas, Frankel and Rose [1998] have proposed the endogeneity thesis of the optimality criteria which they demonstrate by highlighting a significantly positive relation between business cycles synchronization and trade intensity of the monetary union countries. This demonstration admits limits and can lead to erroneous conclusions. It hides an important dimension of the endogeneity of the optimality criteria: the business cycles convergence. From the experience of three monetary unions, we first demonstrate that the endogeneity of the monetary unions can only and rigorously be verified afterwards. We demonstrate secondly that, in addition to a positive relation between business cycles synchronization and trade integration, a cyclical convergence of the economies over the period prior to the monetary union would make the thesis of endogeneity more plausible.

La théorie de l’endogénéité des Zones Monétaires Optimales (ZMO) a identifié deux canaux de justification ex-post du critère de synchronisation des cycles : l’intensité commerciale et la convergence budgétaire des pays membres. Dans ce papier, nous analysons dans une perspective empirique le rôle des Unions Économiques et Monétaires africaines dans la convergence budgétaire des pays membres sur la période de 1990 à 2015. Les résultats de nos estimations montrent que les Communautés Économiques Régionales (CER) africaines réduisent significativement la divergence budgétaire des pays membres. En usant d’une approche séquentielle d’estimation, l’étude démontre que les Zones Monétaires africaines sont plus efficaces que les autres Communautés Économiques Régionales (CER) en matière d’accélération de la convergence des indicateurs budgétaires. Ces résultats mettent en  lumière la vraisemblance et la pertinence de l’hypothèse d’auto-validation dans le temps des Unions Monétaires africaines existantes et prospectives malgré les faibles niveaux de synchronisation des cycles et d’intensité commerciale.

This article aims at providing an eclectic analysis of the theory of optimum currency areas (OCAs). Although the basic tenets of the theory were anticipated during the late 1940s and the 1950s, the theory was developed and maturated in three highly influential papers of Mundell (1961), McKinnon (1963) and Kenen (1969). However, because of internal conflicts and contradictions, the theory gathered gloom for the next two decades before it could make a solid comeback in the early 1990s. Much of the reason of this revival was the efforts towards the reconciliation of these internal conflicts. During this period, the theory moved beyond the usual cost–benefit analysis and reflected a shift from the criteria that emphasise on the state of the economy towards the criteria that focus on desired policy trade-offs. Recent advancements in the area using dynamic general equilibrium analysis shows that the revival of interest in the theory of OCA reflects developments in a literature that has little to do with the subject of OCAs itself. The merit of the OCA theory is that it helps to bring together several strands of the literature on monetary integration.

Few words have such long and complex histories, and have held such widespread influence, as those relating to money. Take the word ‘dollar’, for instance, or ‘franc’, ‘rupee’ or ‘drachma’; all terms that will be familiar to most people, even if they have never actually used them as currency. A new book written by curators at London’s British Museum takes an alternative approach to monetary history. It uses currency terms such as these as its starting point, discussing historical events through the prism of ten well-known coin names. Some are no longer in everyday use, but they survive as linguistic terms, preserved in vocabulary and literature. They are legacies of trade and migration, and are sometimes revived in new and unexpected ways.

This project, inspired by two essays written for papers at Oxford University, discusses fixed and floating exchange rates and single/optimal currency areas.  Drawing on examples from history, the project focuses on European countries and periods of history when these countries participated in fixed exchange rate policy, floating exchange rate policy, and most recently, with the instigation of the Eurozone, a single currency area.  The paper discusses Mundell’s four criteria for optimal currency areas, and whether or not the European Monetary Union (EMU) is an optimal currency area, or if fixed or floating exchange rates were a better option for the European Nations. 
  It then examines three different “classifications” of European nations not in the EMU.  Fixed exchange rates and single currency areas work best among similarly economically developed countries (which is one reason why the EMU has been so successful over the past 15 years).  First, I will discuss why Great Britain, a country as economically developed as the current EMU countries has not joined the EMU, and whether or not it would be beneficial for Britain to do so.  In the next category, are the less economically developed countries of Eastern Europe.  Within the past two to three years, a few Eastern European countries have either joined (e.g. Bulgaria) the EMU or have begun the process to join.  These countries are drastically less developed than the major Western European countries.  Thus, their individual success in the EMU will be uncertain, as will their affect on the EMU as a whole.  I will discuss current EMU policy on allowing these countries to join (such as having these countries tie their currencies to the Euro—joining the ERM II, and ensuring that inflation remains extremely low within these countries for a number of years), and the effects of their entrance into the EMU.  Lastly, I will discuss the allowance of Eurasian countries such as Turkey into the EMU.  While Turkey is (partially) on the European continent, its economy effectively behaves more like an Asian country than a European one.  Yet, it has begun the process to join the EMU in hopes of achieving not only economic growth, but also viability on the world stage.

Renovatio Monetae, myntförnyelse, är ett latinskt uttryck som syftar på myntindrag-ningar där gamla mynt förklarades ogiltiga och ersattes med nya. Myntindragningarna gav viktiga intäkter för den medeltida myntherren och de kunde ske så ofta som varje halvår. Vid dessa indragningar togs en växlingsavgift ut-i praktiken en omsättnings-skatt på mynt. Ett genomgående tema i denna bok är att medeltida brakteater, lövtunna ensidiga mynt, är starkt kopplade till sådana myntindragningar under högmedeltiden, vilket redan bokens titel avslöjar. Brakteaterna ägde flera egenskaper som gjorde dem lämpliga som tidsbegränsade mynt, bland annat relativt låga tillverkningskostnader och i flera fall en stor yta som möjliggjorde varierande motiv. Roger Svensson, docent i nationalekonomi och verksam vid Institutet för Näringslivs-forskning (IFN), visar att systemet med myntindragningar och brakteater var domineran-de i områden med låg monetarisering. Sådana områden återfanns i de centrala, norra och östra delarna av det högmedeltida Europa. Boken är delvis en kunskapssamman-ställning om vad andra forskare har kommit fram till, men författaren bidrar också med egen analys i flera avseenden-i synnerhet när det gäller att bygga upp en ekonomisk teori om tidsbegränsade mynt och medeltida brakteater.

Interval type-2 fuzzy logic systems (IT2FLSs), have recently shown great potential in various applications with dynamic uncertainties. It is believed that additional degree of uncertainty provided by IT2FL allows for better representation of the uncertainty and vagueness present in prediction models. However, determining the parameters of the membership functions of IT2FL is important for providing optimum performance of the system. Particle Swarm Optimization (PSO) has attracted the interest of researchers due to their simplicity, effectiveness and efficiency in solving real-world optimization problems. In this paper, a novel optimal IT2FLS is designed, applied for predicting winning chances in elections. PSO is used as an optimized algorithm to tune the parameter of the primary membership function of the IT2FL to improve the performance and increase the accuracy of the IT2F set. Simulation results show the superiority of the PSO-IT2FL to the similar non-optimal IT2FL system with an increase in the prediction.

While it is early to mourn the euro, it would be unwise to ignore the magnitude and significance of the changes now taking place in the Eurozone. No doubt, the economic and financial problems in the Eurozone are serious and plentiful. The area is in the midst of multiple, frequently overlapping and mutually reinforcing crises. First, a fiscal crisis is centred
in Greece but visible across the southern Eurozone and Ireland. Governments in Greece and Italy have been replaced in the space of a week because they were unable to guarantee the
rapid implementation of economic reforms. Second, a competitiveness crisis is manifest in large and persistent pre-crisis current-account deficits in the Eurozone periphery and even larger intra-Eurozone current-account imbalances. Italy has accepted IMF and EU monitoring of reforms including deep liberalisation measures that had so far seemed out of reach, notably on labour legislation. Third, a banking crisis was first evident in Ireland but is now spreading throughout the Eurozone via accelerating concerns over sovereign solvencies. Spain, Ireland, Portugal and Greece are undertaking fiscal and structural adjustment measures – in Ireland, these are already paying off in terms of economic performance and credibility. However, one of the fascinating aspects of the European debt crisis has been the resilience of the euro, suggesting
these fears are overblown. The euro is still a reserve currency, oblivious to the chaos ravaging European economies. As the Euro zone debt crisis enters a new uncertain year, the
question about whether the euro can survive rises. This paper argues that the European crisis is political, and even largely presentational. The paper shows that the Euro can survive as the policymakers in the Eurozone still have various tools to use. These tools include creating exit rules, implementing new stabilisation rules and instruments, adopting new fiscal policy, introducing conditional Eurobonds, using inflation differentials and providing more independence to the European Central Bank.

The purpose of this study is to analyse which kinds of monetary taxation and coinage policies the minting authorities applied in Sweden in the period 1153-1512. In medieval Europe, old coins were frequently declared invalid and were exchanged for new ones at xed rates and dates. Here, the question of whether and when such periodic recoinage was applied in medieval Sweden is analyzed against the historical record. A theory of how short-lived and long-lived coinage systems work is applied to Swedish coinage. Sweden adopted similar coin forms as those minted in Continental Europe in the Middle Ages, but also adopted the corresponding continental coinage and monetary taxation policies linked to these coin forms. Swedish experience is extraordinarily well in line with what one would expect from the theory of short-lived coins. Economic backwardness, limited mone-tization of society and separate currency areas facilitated recoinage. Recoinage with varying frequency was applied in 1180-1290 when only bracteates were minted. This is evidenced by many different coin types per reign, coin hoards which are dominated by a few types and dating of types to speci c periods of the kings' reigns. However, monetization increased in the late thirteenth century, making recoinage more dif cult. and bracteates were replaced by long-lived two-faced coins in 1290. With an end to recoinage, the Swedish kings then accelerated the debasement of the long-lived coins. The disappearing recoinage fees were compensated for by debasing the silver content. Such debasements-interrupted by several coinage reforms-were applied until the beginning of the sixteenth century.

¿Es un peso andino una alternativa válida a las monedas locales o a la dolarización? Usando la teoría de áreas monetarias óptimas (AMO), este estudio hace un análisis de los costos y beneficios de una Unión Monetaria entre Venezuela, Perú, Ecuador y Colombia; tal y como ya existe en otras regiones del mundo. Para esto se tienen en cuenta algunos aspectos macroeconómicos, comerciales y financieros de estos países. Además, se analiza el grado de integración actual de las economías, evaluando las correlaciones del ciclo del producto y su co-movimiento. En este aspecto, el estudio concluye que existen condiciones para adoptar una política monetaria común, lo que a su vez se traduciría en una moneda común. Como lo sugiere la experiencia europea, una moneda común es uno de los mayores factores para consolidar la paz, el comercio y la estabilidad entre las naciones participantes. Este trabajo profundiza el caso de la integración entre Ecuador y Colombia dado que es quizás uno de los más simples, aunque igual se podría haber escogido un par diferente de países.

The goal of ECOWAS is to introduce a common currency by 2020 by integrating the CFA franc currently used by the Francophone countries and the ECO of the Anglophone countries of West Africa. The approach to introducing the ECO is similar to that used to introduce the EURO within the European Union. The euzone is going through a period of crises and so it is imperative that cues are taken from the current crises in order to avoid committing similar mistakes. The paper analyses the causes and effects of the crises. It was found that macroeconomic mismanagement, rising governments debt levels, trade imbalances, loss of confidence, and lack of transparency on the part of some countries are the main causes of the crises. Political integration or similar political, economic and financial policies were recommended as a way to help avoid crises such as that of the eurozone.

To what extent can the Euro be called a succes in economic terms? This paper investigates to what extent the Euro Area constitutes an Optimum Currency Area, ten years after its inception. It finds that the Euro Area is lacking in several important OCA indicators, and that the 'endogenous OCA theory' is only marginally influential at best. The paper also evaluates the predictive value of OCA analysis, and concludes that OCA criteria play a critical role in predicting the succes of a currency union.

This paper presents a second law analysis for the optimal geometry of fin array by forced convection. The analytical analysis involves the achievement of a balance between the entropy generation due to heat transfer and entropy generation due to fluid friction. In the design of a thermal system, it is important to minimize thermal irreversibilities because the optimal geometry will be found when the entropy generation rate is minimized. In this paper, the entropy generation rate is discussed and optimum thickness for fin array is determined on the basis of entropy generation minimization subjected to the global constraint. In addition, the influence of cost parameters on the optimum thickness of fin array is also considered and presented in graphical form. It has been found that the increase in cross flow fluid velocity will enhance the heat transfer rate that will reduce the heat transfer irreversibility. © 2006 Elsevier Ltd. All rights reserved.

http://ac.els-cdn.com/S1359431106003875/1-s2.0-S1359431106003875-main.pdf?_tid=cdd246b8-a9c7-11e3-a55c-00000aacb361&acdnat=1394616316_424d8d9daacef12a570ed24c4008910c 
http://www.sciencedirect.com/science/article/pii/S1359431106003875

Objective: The main goal of the paper is to evaluate, in a comparative manner, the degree of similarities in aggregated demand disturbances in the Visegrad Group (the Czech Republic, Hungary, Poland and Slovakia, collectively: V4) and the Eurozone economies from 1995 to 2013. Research Design & Methods: The underlying demand disturbances are extracted using the structural vector auto-regression (SVAR) model with the long-run restrictions. The identification scheme is based on the theoretical aggregate supply-aggregate demand (AS-AD) model. The obtained approximations of unobservable demand shocks are then used to infer on their correlation structures. Findings: The demand shocks among the four economies are described by the highest correlation among all chosen sub-samples. The dynamic approach revealed that the synchronization of the demand shocks in the V4 Group was stronger even when compared to the EMU core. The adjustments to the demand shocks in the V4 countries are relatively flexible and these economies converge to long-run equilibria at a fast pace. Implications & Recommendations: The V4 countries fulfil substantial criteria of an optimum currency area and could benefit from adoption of a single currency, as well as a common monetary policy. Contribution & Value Added: This comparative empirical study brings evidence on the similarities in aggregate demand shocks within the V4 and EMU countries. Article type: research paper

ABSTRACT


Shared Monetary Governance builds a framework for community level governance of money and fills part of the gap in the literature of monetary governance.  The approach begins with consistent treatment by national regulatory frameworks vis-à-vis both national and non-national currency institutions.  Regulatory framework tolerance is measured by equating more participatory processes with higher degrees of shared governance.  The second part of Shared Monetary Governance explores internal monetary institutional governance.  Consistent regulatory framework treatment, transparency, accountability and participation are then applied to all stakeholders affected by monetary functionality. This juxtaposition of governance vs. scale requires investigation of the processes used to make decisions in monetary institutions.  Since no such dual-paradigmatic investigation has been undertaken, this paper asserts that metrics for such an investigation need to be developed. Shared Monetary Governance includes a methodology which operationalises the  theoretical framework presented in this paper, building a case for full monetary decision-making participation.

This is a new popular book by the Modern Money curator at the British Museum, Thomas Hockenhull. I didn't really write a chapter for it but helped Paramdip Khera draft a section on the Rupee which was later revised by Paramdip, Tom, and Leigh Gardner (at the LSE) to become the chapter on the Rupee.

The present research employs a vector autoregression (VAR) approach to assess the degree of business cycle synchronization between the new member states (NMS), which have not adopted the single European currency, and the Euro area (EA). The main fiscal and monetary factors affecting the business cycle coordination between the NMS and the EA have been identified. The causality between the business cycle convergence of the NMS and the EA and the implemented fiscal and monetary policies has been investigated in the short and in the long term. Recommendations and conclusions on the readiness of the NMS to join the EA have been made.

This paper presents a second law analysis for the optimal geometry of fin array by forced convection. The analytical analysis involves the achievement of a balance between the entropy generation due to heat transfer and entropy generation due to fluid friction. In the design of a thermal system, it is important to minimize thermal irreversibilities because the optimal geometry will be found when the entropy generation rate is minimized. In this paper, the entropy generation rate is discussed and optimum thickness for fin array is determined on the basis of entropy generation minimization subjected to the global constraint. In addition, the influence of cost parameters on the optimum thickness of fin array is also considered and presented in graphical form. It has been found that the increase in cross flow fluid velocity will enhance the heat transfer rate that will reduce the heat transfer irreversibility.

This paper aims to investigate whether structural shocks among ASEAN countries are becoming more symmetrical over time, thus indicating whether this region is becoming better prepared to introduce a common monetary policy. For that purpose a dynamic space-state model that complements the conventional Structural VAR models used in the existing literature was estimated by using the Kalman filter so that the evolution of the degree of shock symmetry and, therefore, the evolution in the degree of convergence could be identified over time, distinguishing between a country’s convergence with a regional partner and a more general trend of convergence with the rest of the world. The results showed that in the majority of cases there has been an increase in the degree of convergence of demand shocks in recent years. More importantly, it also showed an increase in divergence in supply shocks for most cases since the beginning of the 90’s even when taking into account the Asian Financial Crisi...

Шматько А.Е. Проблема оптимальных валютных зон в контексте реформирования международной валютной системы / А.Е. Шматько // Економічні та соціальні інновації як фактор розвитку економіки: зб. міжнар. наук.-практ. конф., (м. Київ, 4-5 квітня 2014 р.). У 4-х частинах. – К.: ГО «Київський економічний науковий центр», 2014. – Ч. 4. – С. 14-16.

One of the practical issues that dominates the debate within the left and in the Portuguese society in general as a consequence of the Euro Crisis, is the question if Portugal should or should not stay in the Eurozone. Since the intervention of Troika in Portugal we have seen different organizations on the left and on the right take different points of view in this issue. A deeper understanding of this issue is crucial to find possible ways out of the current crisis situation.
The first section will address the methodological issues. The second section will draw the historical context of euro-scepticism in Portugal. The third section will draw the mainstream theoretical arguments on optimal currency areas. In the fourth section we draw the arguments pro and against the euro-exit on the basis of texts of the BE and the PCP. In the fifth section I will show how a Parallax view (Zizek, 2006) could solve the problem for their contradictions.

Currently, there is a need for reform of global monetary circulation and credit, which in a sense has stalled. The key is to restore the connection between monetary circulation and real production. In the first part of this study, I provide a brief analysis of the catastrophic consequences that the current design of reserve currencies has led to for the world economy. At the same time, the transition from the dollar to other reserve currencies operating on the same principles, the ethos of which is now being actively promoted in the West, will not improve the situation. In the second part, I demonstrate the efforts being made to de-dollarize settlements by both the BRICS, the EU, and the EAEU countries. The third part shows the successful historical experience of the transferable ruble as an international currency that functioned in 1960-1980 on non-discriminatory principles within the Council for Mutual Economic Assistance (CMEA). In the fourth part, the international currencies al...

ABSTRACT Robert Mundell (1961. “A Theory of Optimum Currency Areas.” The American Economic Review 51 (4): 657–665) framed the fixed-versus-flexible exchange rate controversy in a novel way when he focused attention on currency areas and the ingredients necessary for a group of nations to form an optimal currency area (OCA). This paper proposes an analogous theory for cryptocurrencies, called optimal currency scope (OCS), and explains the conditions necessary for an OCS to exist. In contrast to an OCA, which is defined by its non-overlapping geographic areas, an OCS is defined by its multiple-overlapping attributes and the needs they solve, which we call scope. Scopes are not geographic and have fuzzy boundaries; so, the possibility of competing currencies in a single scope needs to be considered. The central issues surrounding an OCS are the optimal number and magnitude of currency attributes, rather than whether nations should adopt fixed versus fluctuating exchange rates. Similar to the findings since Mundell first introduced his OCA Theory, we find that the optimum number of cryptocurrency attributes and, therefore, the optimal number of cryptocurrencies must be determined empirically rather than theoretically.

Шматько А.Е. Международная валютная система и модернизация экономики Украины / А.Е. Шматько // Проблеми фінансово-економічного та соціального розвитку країн: збірник матеріалів Міжнародної науково-практичної конференції (м. Київ, 5-6 вересня 2014 р.). – К.: ГО «Київський економічний науковий центр», 2014. – С. 96-97.

This paper aims to investigate whether structural shocks among ASEAN countries are becoming more symmetrical over time, thus indicating whether this region is becoming better prepared to introduce a common monetary policy. For that purpose a dynamic space-state model that complements the conventional Structural VAR models used in the existing literature was estimated by using the Kalman filter so that the evolution of the degree of shock symmetry and, therefore, the evolution in the degree of convergence could be identified over time, distinguishing between a country’s convergence with a regional partner and a more general trend of convergence with the rest of the world. The results showed that in the majority of cases there has been an increase in the degree of convergence of demand shocks in recent years. More importantly, it also showed an increase in divergence in supply shocks for most cases since the beginning of the 90’s even when taking into account the Asian Financial Crisi...

After achieving substantial progress in establishing a common customs territory and regulations, customs unions face potential disruptions due to a lack of monetary poli­ cy coordination. These disruptions might appear in the form of currency shocks and the ensuing trade conflicts. We approach this issue by looking at the case of the Eurasian Economic Union (EAEU). The volatility of national currencies in 2014-2015 resulted in sizable shifts in competitiveness, culminating in a currency crisis in some member states. This raises the questions of how to gradually achieve a more coordinated monetary policy , what monetary policy options are available, and what would be their relative im­ pact on macroeconomic stability. Using a set of modeling tools and econometric models, we review three monetary regimes, which represent moves from fully independent ex­ change rate policy through increased policy coordination to joint exchange rate setting.

Resumen El presente trabajo tuvo como propósito analizar el contexto histórico que dio origen a la teoría de las áreas monetarias óptimas. Para ello, en primer lugar, se revisa cómo surgió y cómo ha evolucionado dicha teoría, y en segundo lugar, se analiza el proceso de unificación monetaria europea. El análisis realizado permitió comprobar que la referida teoría económica no se originó de las circunstancias presentes en los primeros años del proceso de inte-gración monetaria de Europa, que comienza en 1969 con el informe Barré y sigue en 1970 con el informe Werner, sino se derivó de la discusión acerca del mecanismo de ajuste más conveniente para las economías y como justificación de las bondades de los esquemas cambiarios fijos para minimizar los costos de transacción en grupos de economías que se comportan como regiones. Palabras clave: Áreas monetarias óptimas, moneda única, integración monetaria, unión monetaria europea.
Abstract The purpose of this study was analyzing the historical context that gave rise to the optimum currency area theory through a review of the rise and evolution of the theory, and an examination of the development of the European single currency. The analysis proves that the optimum currency area theory did not originate during the early years of the European currency integration process that began in 1969 with the Barre report, and followed by the Werner report in 1970. This theory arose from the discussion about the most convenient adjustment mechanism for the economy, and as a justification of the benefits of fixed currency exchange regime in minimizing the transaction costs in economy groups that behave like regions.

The minimum weight design of an axisymmetric rotating abrasive disk in the presence of a side tool load is obtained under the strength and stiffness constraints. The PARS (Programs for Analysis and Resizing of Structures) system which employs an optimization procedure based on a mathematical programming method using the Sequence of Unconstrained Minimization Technique (SUMT) is used. The derivatives of the inertia load vector which depends upon the resized dimension (thickness) of the disk are obtained analytically. They are needed in the computation of the derivatives of stresses and displacements, which are also obtained analytically. Due to symmetry, only half of the abrasive disk is modelled using general plate finite elements having bending and extensional stiffnesses. It is shown that by permitting tapered radial thickness distribution, a lighter and much stronger design can be achieved as compared to disks of uniform thickness.