Price adjustment in currency unions: another dimension to the endogeneity of the optimum currency area criteria?
In a rational expectations model, wages and prices should respond more to shocks in currency unions than under adjustable pegs because of the absence of exchange rate adjustment. This is an aspect of the endogeneity of the optimum currency area criteria that has been largely ignored. Empirical evide...
| Main Authors: | , |
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| Format: | Article |
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Wiley
2018
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| Online Access: | https://eprints.nottingham.ac.uk/49791/ |
| _version_ | 1848798079166185472 |
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| author | Bleaney, Michael Yin, Lin |
| author_facet | Bleaney, Michael Yin, Lin |
| author_sort | Bleaney, Michael |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | In a rational expectations model, wages and prices should respond more to shocks in currency unions than under adjustable pegs because of the absence of exchange rate adjustment. This is an aspect of the endogeneity of the optimum currency area criteria that has been largely ignored. Empirical evidence from three currency unions tends to suggest some degree of endogeneity of price flexibility, but the rate of adjustment is slow. Self-selection into currency unions by countries with naturally greater price flexibility does not appear to be a significant factor. |
| first_indexed | 2025-11-14T20:14:04Z |
| format | Article |
| id | nottingham-49791 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T20:14:04Z |
| publishDate | 2018 |
| publisher | Wiley |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-497912020-05-04T19:28:21Z https://eprints.nottingham.ac.uk/49791/ Price adjustment in currency unions: another dimension to the endogeneity of the optimum currency area criteria? Bleaney, Michael Yin, Lin In a rational expectations model, wages and prices should respond more to shocks in currency unions than under adjustable pegs because of the absence of exchange rate adjustment. This is an aspect of the endogeneity of the optimum currency area criteria that has been largely ignored. Empirical evidence from three currency unions tends to suggest some degree of endogeneity of price flexibility, but the rate of adjustment is slow. Self-selection into currency unions by countries with naturally greater price flexibility does not appear to be a significant factor. Wiley 2018-01-27 Article PeerReviewed Bleaney, Michael and Yin, Lin (2018) Price adjustment in currency unions: another dimension to the endogeneity of the optimum currency area criteria? Oxford Bulletin of Economics and Statistics . ISSN 1468-0084 http://onlinelibrary.wiley.com/doi/10.1111/obes.12235/abstract doi:10.1111/obes.12235 doi:10.1111/obes.12235 |
| spellingShingle | Bleaney, Michael Yin, Lin Price adjustment in currency unions: another dimension to the endogeneity of the optimum currency area criteria? |
| title | Price adjustment in currency unions: another dimension to the endogeneity of the optimum currency area criteria? |
| title_full | Price adjustment in currency unions: another dimension to the endogeneity of the optimum currency area criteria? |
| title_fullStr | Price adjustment in currency unions: another dimension to the endogeneity of the optimum currency area criteria? |
| title_full_unstemmed | Price adjustment in currency unions: another dimension to the endogeneity of the optimum currency area criteria? |
| title_short | Price adjustment in currency unions: another dimension to the endogeneity of the optimum currency area criteria? |
| title_sort | price adjustment in currency unions: another dimension to the endogeneity of the optimum currency area criteria? |
| url | https://eprints.nottingham.ac.uk/49791/ https://eprints.nottingham.ac.uk/49791/ https://eprints.nottingham.ac.uk/49791/ |