The Eurozone and the Optimal Currency Area Theory

In this paper it will be investigated whether the EMU currently is an OCA and if not whether it could become one. The OCA criteria will be defined and empirical findings from other researches will be used to conclude whether the EMU fulfills the OCA criteria. Additionally, it will be investigated how the EMU could become an OCA and also whether the Euro could be sustained if the EMU does not become an OCA at all. It can be concluded that the Euro zone is still not an OCA, but it is making progress towards one. There are several points of improvements for the EMU in order to become an OCA. However, it is not necessary for the EMU to become an OCA to stay sustainable.