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Hurricane sandy - Essay Example

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A currency union, also referred to as monetary union, refers to a situation where two or more countries use a similar currency without need fully having any other consolidation such as the monetary or economic union. There are three kinds of currency unions i.e. formal, formal…
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Hurricane sandy
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Download file to see previous pages a common policy refers to an institution established by a number of states with a mutual offering authority for the currency and monetary policy (Cohenen, 2012).
Over the past few decades there has been observed a developing importance in currency fusions and monetary consolidations. This impression of exchange regions dates back to the Mundell’s Optimum Currency Areas. He asserts that “ if the world can be divided into regions within each of which there is a factor mobility and between which there is factor immobility, then each of these regions should have a separate currency that fluctuates relative to all other currencies” (Mundell, 1961, pp.56). The mobility of the inputs should act as the adjusting instrument if any region experiences asymmetric shock. In the absence of these inputs, the overseas exchange rate elasticity is not anticipated to execute the stabilization role assigned to it while the changing unemployment rates and inflation in the diverse areas would dominate.
There has been various monetary unions in the various continents i.e. in Africa there has been the West African states who came together to share a common CFA franc currency, there also has been the multilateral Monetary Area to use the South African Rand. In Europe, there has been the European Union who uses the Euro as the common currency. There are other currency unions which have been proposed in other parts of the world i.e the East African Corporation that is scheduled to kick start by 2015, the West African Monetary Zone and the Gulf Corporation Council that is targeted to start within 2013 to 2020. These unions across the different nations have been faced with various challenges and most of them have flopped rendering a single currency impossible within the member states. Most of these unions also collapse due to some asymmetrical penchants and preferences that the union brings to the different states where one country may be favored than the other. Due to this ...Download file to see next pagesRead More
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Hurricane sandy
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