Monetary Union

(redirected from Currency Unions)

Monetary Union

A group of independent countries that share a single currency. That is, these countries, while maintaining sovereignty on economic policy, taxes, and similar issues, have transferred responsibility for a monetary policy to a central bank shared by participating members. The most famous monetary union is the eurozone, though another example is the West African Monetary Union. A monetary union is also called a currency union.
References in periodicals archive ?
In the recent years, there has been a rise in regional integration activities such as membership of currency unions and regional agreements.
The relevance of this estimate for the EMU was questioned on the grounds that it largely reflects the experiences of less developing countries in multilateral currency unions or in "hub and spoke" relations with a large anchor country.
This study is an attempt to partially address this issue by examining the interaction terms associated with currency unions and looking at the square and cube of the GDP variables.
currency unions, captured within its cross-sector methodology "Local
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.
Former Labour Chancellor Alistair Darling, who leads the Better Together campaign to keep Scotland in the UK, said: "This is a detailed speech but make no mistake - the governor's judgment on currency unions is devastating for Alex Salmond's currency plans."
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. They spoke about how the economies of the countries joining the union could be affected, the legal framework, and the process of changeover.
Other studies have focused on the differential effects of pegged-versus-fixed exchange rates (including stricter forms of fixed exchange rate regimes, such us currency boards or currency unions).