A Common Currency with Brazil: A Misapplication of Optimal Currency Area Theory
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Drawing inspiration from the theory of optimal currency areas (OCA), some economists and analysts advocate for a shared currency arrangement with Brazil and other countries in the region. Is this a good idea? Regarding a joint currency initiative with Brazil, the first point to consider is that, in line with the OCA theory, Argentina should establish currency subregions rather than immediately launching a common currency with Brazil. A consistent OCA application cannot assume that inside-the-borders belongs to one common optimal currency area.
A Common Currency with Brazil: A Misapplication of Optimal Currency Area Theory
A Common Currency with Brazil: A…
A Common Currency with Brazil: A Misapplication of Optimal Currency Area Theory
Drawing inspiration from the theory of optimal currency areas (OCA), some economists and analysts advocate for a shared currency arrangement with Brazil and other countries in the region. Is this a good idea? Regarding a joint currency initiative with Brazil, the first point to consider is that, in line with the OCA theory, Argentina should establish currency subregions rather than immediately launching a common currency with Brazil. A consistent OCA application cannot assume that inside-the-borders belongs to one common optimal currency area.