Overview
Currency Unions reviews the traditional case for flexible exchange rates and "countercyclical"â€â€that is, expansionary during recessions and contractionary in boomsâ€â€monetary policy, and shows how flexible exchange rate regimes can better insulate the economy from such real disturbances as terms-of-trade shocks. The book also looks at the pitfalls of flexible exchange ratesâ€â€and why fixed rates, particularly full dollarizationâ€â€might be a more sensible choice for some emerging-market countries. The contributors also detail the factors that determine the optimal sizes of currency unions, explain how currency union greatly expands the volume of international trade among its members, and examine the recent implementation of dollarization in Ecuador.Author Biography
Alberto Alesina received his Ph.D. in 1986 from Harvard, where he became a full professor in 1993. Robert J. Barro is a senior fellow at the Hoover Institution and the Robert C. Waggoner Professor of Economics at Harvard University. He is an editor of the Quarterly Journal of Economics.
