Optimum Currency Area Theory and Monetary Integration as a Gradual Process

The concept of (regional) economic integration refers both to a state of affairs and a process(Balassa, 1961).1 In this contribution we will refer to integration seen as a gradual process.Both in terms of the agenda of the negotiations, as in terms of the number of countries takingpart in the integration treaties, post-war regional integration can indeed be perceived andobserved as a cumulative and partly irreversible (or, at least, costly-to-reverse) process.Integration in the European Union context and in other geographical areas can easily bemodelled as a process of both ‘deepening’ and geographical expansion...