By Sykuta M.E., Cook M.L.

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Fidrmuc, J. (2004), ‘‘The endogeneity of the optimum currency area criteria, intra-industry trade, and EMU enlargement’’, Contemporary Economic Policy, Vol. 22(1), pp. 1–12. Financial Times (2005), ‘‘Italian minister moots return of the lira’’, 3 June. Fossum, J. J. Menendez (2005), ‘‘The draft constitutional treaty: between problem-solving treaty and rights-based constitution’’, European Institute of Public Administration, Working Paper No. 2005/W/04. Frankel, J. (2004), ‘‘Real convergence and euro adoption in central and eastern Europe: trade and business cycle correlations as endogenous criteria for joining EMU’’, KSG Working Paper No.

One policy implication is that to bring the euro area closer to Mundell’s idea of an optimum currency areas (OCA), measures are needed to limit inflation persistence at the national level and monetary policy should be aimed at stabilizing aggregate inflation. The discussion so far is of crucial importance to the ongoing process of EMU enlargement: If important, OCA criteria are endogenous and can (or should) be influenced by economic policy, what is the reason behind enforcing ex ante convergence for new EMU entries?

12, pp. 165–221. Grant, C. (2003), ‘‘The liberal case for the constitution’’, Wall Street Journal, 30 October. Grossman, G. and E. Helpman (2001), Special Interest Politics, Cambridge, MA: MIT Press. Glick, R. and A. Rose (2002), ‘‘Does a currency union affect trade? The timeseries evidence’’, European Economic Review, Vol. 46, pp. 1125–1151. Habermas, J. (1996), Between Facts and Norms: Contributions to a Discourse Theory of Law and Democracy, Cambridge, MA: MIT Press. 28 Helge Berger and Thomas Moutos Hausmann, R.

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