Assessing whether the Euro zone is an optimal currency Area

Abstract

The aim of this paper is to analyze whether the Euro zone is an optimal currency area. The analysis takes into consideration the existing literature and the empirical data for several criteria of the optimum currency area theory. Since the introduction of the euro there have been significant advancements in fulfilling some of the criteria, but there is still a need of further progress in terms of wage flexibility, fiscal and political integration. The final conclusion is that Euro zone is not an optimum currency area.euro, optimum currency area, Economic and Monetary Union.