OCA Index as Indicator of the Czech Republic‘s Preparedness to Join the European Monetary Union

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F46747885%3A24310%2F21%3A00009192" target="_blank" >RIV/46747885:24310/21:00009192 - isvavai.cz</a>

Result on the web

<a href="https://doi.org/10.33543/11029194" target="_blank" >https://doi.org/10.33543/11029194</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.33543/11029194" target="_blank" >10.33543/11029194</a>

Result language

angličtina

Original language name

OCA Index as Indicator of the Czech Republic‘s Preparedness to Join the European Monetary Union

Original language description

The optimum currency area (OCA) theory evaluates the currency area as optimum at a time when the participating countries are not at risk of macroeconomic instability due to the existence of a common currency. The OCA index is a tool used to comprehensively assess the costs and benefits of a candidate for joining a monetary union. It is constructed as a bilateral index assessing the appropriateness of introducing the single currency in two countries. The article presents the OCA index quantified for the Czech Republic in relation to Germany, which is considered to be the core of the European Monetary Union. Since the OCA index needs to be interpreted in a temporal or spatial comparison, the calculation of the OCA index was also performed for other countries of the Visegrad Group (V4) and furthermore for Austria and Portugal, using data from the period of 2007–2019. The results of the OCA index show a high degree of variability in the Czech Republic in the observed period. While in the first half of the period under review, the Czech Republic achieved the best results within the assessed economies and the Czech Republic‘s level of preparedness for the common currency with Germany was higher than in the case of Austria, it fell sharply after 2012. The reason can be seen, among other things, in the higher growth rate of the Czech economy than in the euro area. Although the OCA index is an indicator assessing the preparedness of an economy to join a monetary union, it cannot be the only indicator. Other important criteria include, for example, labour mobility, price and wage flexibility, fiscal integration and more. Although the Czech Republic is approaching the euro area average in all key indicators, the gap from it remains significant for most indicators and thus continues to be a factor against the adoption of the euro in the coming years.

Czech name

—

Czech description

—

Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

—

OECD FORD branch

10700 - Other natural sciences

Project

—

Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2021

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Ad Alta: Journal of Interdisciplinary Research

ISSN

1804-7890

e-ISSN

—

Volume of the periodical

11

Issue of the periodical within the volume

2

Country of publishing house

CZ - CZECH REPUBLIC

Number of pages

4

Pages from-to

91 - 95

UT code for WoS article

000753176300016

EID of the result in the Scopus database

—