The main objective of this thesis is to find out whether the PRoC is an OCA and what does it mean for the EMU. Based on the differences between the two currency areas, I would like to discuss whether there are any lessons that are worthwhile to be learned from the PRoC by the EMU to face better current and future crises. Therefore, the thesis is organized as follows. Section 2 provides an overview of the theoretical framework which this bachelor thesis is based on, namely the theory of OCA. Section 3 explains the methodology of my empirical study and describes the used data set. Section 4 examines the PRoC as an OCA. I evaluate each criterion on the basis of my own empirical study or available literature. After I briefly analyzed the Euro Crisis in section 5, I compare the EMU with the PRoC on the basis of OCA criteria followed by a discussion why there are differences and whether the EMU could improve conditions as a common currency area by learning from the PRoC. Section 6 concludes my findings and relate them to my opening questions of this introduction.
Content
Abbreviations
1. Introduction
2. Theoretical Framework
2.1. The Classical Theory of OCA
2.2. The New Endogeneity Approach of OCA
2.3. Critique
3. Data Set and Methodology
3.1. Selection of OCA Criteria
3.2. Key Figures: Calculation, Sources and Characteristics
4. OCA Characteristics of the PRoC
4.1. Market Size
4.2. Production Diversification
4.3. Stability and Predictability of Prices
4.4. Price Flexibility
4.5. Wage Flexibility
4.6. Interprovincial Trade
4.7. Production Similarity
4.8. Labor Mobility
4.9. Capital Mobility
4.10. Convergence of Prices
4.11. Synchronicity of Business Cycles
4.12. Fiscal Transfers
4.13. Summary: Is the PRoC an OCA?
5. Are there any Lessons for the EMU?
5.1. Problems of the EMU as a Common Currency Area and its Causes
5.2. What are the Crucial Distinctions between the EMU and the PRoC as Common Currency Areas?
5.3. Is There Something to Learn for the EMU?
6. Conclusion
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