Who Gains (Relatively) From Monetary Union? An Estimate of Relative Net Benefits for EU 15 Member States*

Paper number: 97/13

Paper date: 28 November 1997

Year: 1997

Paper Category: Discussion Paper


Anca-Manuela Porojan
University of Exeter


This paper addresses the issue of the distribution by country of the costs and benefits associated to the introduction of a single currency in Europe, by estimating the relative costs and benefits for the 15 member states throught the use of exploratory multivariate statistical techniques. The results indicate an uneven distribution of the potential relative costs and benefits across the EU member states. Moreover, it is found that not all the characteristics identified as relevant by the optimum currency area literature are equally important in shaping the net outcome of the move to the single currency.

JEL Classification Nos: E19; E50; O52
Keywords: Single currency; factor analysis; discriminant analysis

Corresponding Author: Anca-Manuela Porojan, Department of Economics, University of Exeter, Amory Building, Rennes Drive, Exeter, EX4 4RJ, UK, tel: (44) 1392 263226, fax: (44) 1392 263242, email: A.M.Porojan@exeter.ac.uk


* I would like to thank Ben Lockwood for his invaluable comments