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The Euro was always conceived by most Economists as a political goal, not an economic one. Prologue: There is the theory of Optimum Currency Areas (OCA) which characterizes properties that a larger area would need to have if it were to operate on a single unit of currency. Since the announcement of the Euro around 1990, there were many papers that looked ...


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After a period of time they would switch back. Why? The monetary systems of each country are based on fractional reserve banking, which creates a leveraged relationship between currency and deposits within the banking system. Both forms of money are used interchangeably for purchases, although in practice the use of bank deposits dominates in modern ...


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tl;dr: That quote refers to conditions for currency area/monetary union to work optimally. Even sub-optimal monetary union can exist. Furthermore, the gold standard existed in era of relative stability, low government spending and actually in era where movement of labor and capital was virtually unrestricted. As soon as that era ended gold standard collapsed....


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Get a copy of De Grauwe's "Economics of Monetary Union". The most recent version (13th edition) is quite recent, from this year. So if there is a "famous" recent paper, it is discussed in there. The book is certainly more guided than searching for recent papers that cite Robert Mundell.


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