Welfare effects of monetary integration: an analysis for economies with frictions on the foreign exchange market

• Ano de defesa: 2024
• Autor(a) principal: Cruz, Samuel Levi Alves
• Tipo de documento: Dissertação
• Tipo de acesso: Acesso aberto
• Idioma: eng
• Instituição de defesa: Biblioteca Digitais de Teses e Dissertações da USP
• Palavras-chave em Português: Exchange market; Fricções; Frictions; Mercado de câmbio; Moeda; Monetary union; Money; União monetária
• Link de acesso: https://www.teses.usp.br/teses/disponiveis/96/96131/tde-28062024-135805/

This research examines the formation of common currency areas and understand the effects on member countries. A theoretical approach to the problem is proposed by analyzing these effects in a monetary model with trade frictions and also frictions in the foreign exchange market. The analysis is carried out by comparing the formation of a monetary union between two countries, using the developed model as a basis. We determine the conditions under which a single currency economy yields greater trade efficiency compared to the case of multiple currencies. Additionally, it finds that, under identical monetary policies, the welfare in an economy with a single currency consistently surpasses that of an economy with multiple currencies. The result of this research can be useful for decision-making in economic policies and for the development of future currency unions.