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: www.cepr.org/pubs/dps/DP6254.asp

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.