Economics, Econometrics and Finance
4 years ago

New EU members in Eastern Europe form currency area with eurozone.

Do the new EU member states form an Optimum Currency Area with the eurozone? Evidence from six Central and Eastern European Countries
Dimitrios Sideris

Paper Summary

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The six Central and Eastern European Countries are found to form an Optimum Currency Area with the eurozone, according to a study using the theory of Generalized Purchasing Power Parity. This means that these countries share a common currency area with the eurozone, based on the behavior of their long-run real exchange rates.