Monday, October 24, 2011

Wikipedia on Optimum Currency Area

There seems to be quite a bit of legitimate controversy about Optimum Currency Area. Keynsians seem to think: one sovereign state, one currency, Austrians seem to think currency should often be privately run (like stock exchanges, perhaps?) but a more technocratic Austrian might concede heavy public regulation of a private national, subnational, or supernational currency.

optimum currency theorists seem to think the US probably should have a couple regional currencies, but we're not doing that bad with one currency. The major element seems to me to be if a region tends to cycle economically -that region should share a currency and be divorced from currencies of regions that cycle differently.

Since there seems to be a lot of good faith disagreement here I think diversified experimentation makes a a lot of sense.

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