Fourth, cross–border formal currency unions
without political union are almost always temporary.
He said: "I am pleased that the governor took this opportunity to confirm the Bank of England's neutrality on the issue of Scottish independence and that his Edinburgh speech was a technical assessment of currency unions
not a judgment on independence.
There are enough examples of indebted countries in currency unions
that endured destructive feedback loops and eventual severe recession to warrant full and thorough consideration.
If such deliberations ever were to happen, they would need to consider carefully what the economics of currency unions
suggest are the necessary foundations for a durable union, particularly given the clear risks if these foundations are not in place," Mr Carney said at a business lunch in Edinburgh.
Yesterday, setting out the threats that can endanger currency unions
, Mr Carney said: "Those risks have been demonstrated clearly in the euro area over recent years, with sovereign debt crises, financial fragmentation and large divergences in economic performance.
require a mechanism for permanent transfers to poorer regions.
Just as it is the responsibility of creditor regions in the world's other currency unions
to support the debtor regions (which they do through a variety of means), it is up to the eurozone's creditor regions to underpin its debtor regions' solvency.
Retrospectively, they seemed to have overestimating the coordination of business cycles within the eurozone because they looked at historical data for several mainly small currency unions
composed of countries unlike those of the eurozone in terms of scale or characteristics.
Most economic studies indicate that currency unions
tend to encourage and facilitate trade between member states, chiefly through the removal of exchange rate volatility and transaction costs within the currency area.
Erwin Nierop, Senior Official from the European Central Bank, focused on the efforts in many regions to create currency unions
While the methodology developed in this paper can be applied to the analysis of different exchange rate arrangements, we illustrate it here with one specific application: the effect of currency unions
on bilateral trade and on the extent of comovement of output shocks and price shocks.
Before delving into the regional monetary integration processes and the potential costs and benefits of currency unions
in Africa, it would be useful to reflect on what is meant exactly by EMU.