Scotland as an Optimal Currency Area

Since the Scottish independence movement has reached the point that there will be a referendum on Scottish independence this September, the issue of whether the Scotland is optimal currency areas is very topical.In this paper we review the microeconomic foundations of an optimal currency area. We test these microeconomic foundations. We find that the UK, Scotland and the UK without Scotland meet the microeconomic criteria for a common currency area. While adopting a common currency is ultimately a political decision, these results imply that the broadest of these areas, the UK, is the optimal currency area in the sense of minimizing transactions costs.We do find differences in the UK less Scotland and Scotland economies in loan data. We further find that neither the euro bloc nor the euro bloc including Scotland meet the microeconomic criteria for a common currency area. In the event of a “yes” vote for Scottish independence, the immediate problem facing the Scottish government is to decide on an exchange rate regime that is seen as credible by the financial markets to avoid a flight of capital. How policymakers chooses between alternative exchange rate regimes is currently a topic for hot debate in central banking circles and the process of a monetary union breaking up is a fascinating area worthy of future research

Stock Market Volatility, Risk Attitude and the Demand for Money in the UK

Is stock market volatility an important determinant of money demand in the UK? If yes, what is the driving force behind that effect? In a cointegration framework, we find that volatility in share prices is an important positive determinant of money demand, alongside standard variables and the stock price level. By studying different stock market indexes effects, we find that the risk aversion of investors is an important force behind the effect, implying that the effect is due to investors’ flight to safer assets in times of volatile stock prices

A method for exploring similarities and visual references to brand in the appearance of mature mass-market products

Product appearance and in particular its association with branding has been shown to play an increasingly important role in the commercial success of mature mass-market products. This paper presents a novel approach to analyse product appearance and explore similarities between products. The approach is applied to two contemporary industrial examples, smartphones and vehicles, and the outcome used to explore the strategic use of visual references to brand in product appearance. Results from the method's application validate the method in providing insights in terms of specific similarities in appearance. Further interpretation is then used to recommend possible design strategies with respect to the use of visual references to brand