The OCA Approach to Exchange Rate Regimes

Thomas D. Willett

in The Dollarization Debate

Published in print May 2003 | ISBN: 9780195155358
Published online November 2003 | e-ISBN: 9780199832989 | DOI:
The OCA Approach to Exchange Rate Regimes

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This chapter reviews recent developments in optimal currency area (OCA) theory. It argues that criticisms do not undermine the OCA approach, but rather add to the number of relevant considerations as well as influence the relative weights that should be given to traditional criteria. Thus, OCA criteria do not always provide clear signals about what exchange rate regime a country should adopt.

Keywords: optimal currency area theory; exchange rate regime; monetary policy

Chapter.  8237 words. 

Subjects: International Economics

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