Yes, because it has a very open economy and trades a lot with Eurozone countries.
No, because its economy is not sufficiently synchronised with other Eurozone economies.
Yes, because Romanians are ready to emigrate to other Eurozone countries in case of an asymmetric shock.
Yes, because it has a very flexible economy, which would allow it to deal with potential asymmetric shocks inside the Eurozone.
Yes, because the EU already has sufficient stability mechanisms to help in case of any asymmetric shocks.
Total votes: 220
Learning objectives:
Understanding the benefits of joining a currency area in terms of lower transaction costs and lower exchange rate risk.
Understanding the costs of joining a currency area, and in particular relinquishing devaluation as an economic policy instrument.
Understanding Mundell's theory of optimum currency areas.
Understanding the ECB's structure and decision making.
Understanding the concept of an assymmetric shock, and applying it to the 2008 financial crisis.
Understanding the role of a devaluation to deal with an assymmetric shock.
Understanding the role of labour market flexibility, labour market mobility, and fiscal transfers as alternatives to currency devaluation.
Understanding how the EU budget was reformed in the aftermath of the 2008 financial crisis.
Presentation videos: