Many countries around the world have opted to join currency unions. Examples include those in the euro area, the CFA franc union in West Africa, and the Caribbean currency union. This involves sacrificing the domestic currency in favor of using a single currency unit in multiple countries Assuming that once a country joins a currency union, it will not leave, do these countries face the policy trilemma discussed in the text? Explain.

Many countries around the world have opted to join currency unions. Examples include those in the euro area, the CFA franc union in West Africa, and the Caribbean currency union. This involves sacrificing the domestic currency in favor of using a single currency unit in multiple countries Assuming that once a country joins a currency union, it will not leave, do these countries face the policy trilemma discussed in the text? Explain.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter19: The International Monetary System: Order Or Disorder

Section: Chapter Questions

Problem 8DQ

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