DP6254 Checking Out: Exits from Currency Unions

Author(s): Andrew K Rose
Publication Date: April 2007
Keyword(s): country, data, empirical, monetary, panel, probit, statistic
JEL(s): E42, E58
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=6254

This paper studies the characteristics of departures from monetary unions. During the post-war period, almost seventy distinct countries or territories have left a currency union, while over sixty have remained continuously in currency unions. I compare countries leaving currency unions to those remaining within them, and find that leavers tend to be larger, richer, and more democratic; they also tend to have higher inflation. However, there are typically no sharp macroeconomic movements before, during, or after exits.