Optimum currency area Assignment Essay
| Order ID | 53563633773 |
| Type | Essay |
| Writer Level | Masters |
| Style | APA |
| Sources/References | 4 |
| Perfect Number of Pages to Order | 5-10 Pages |
Description/Paper Instructions
Optimum currency area Assignment Essay
What is an optimum currency area?
An optimum currency area (OCA) is a geographical area that would maximize economic benefits by keeping the exchange rate fixed within the area. This means that the countries in an OCA would use the same currency, and their central banks would coordinate monetary policy.
The concept of OCA was first developed by Robert Mundell in 1961. Mundell argued that there are three key factors that determine whether a group of countries would benefit from forming an OCA:
Factor mobility: The ability of factors of production, such as labor and capital, to move freely between countries.
Goods market integration: The degree to which goods and services can be freely traded between countries.
Symmetric shocks: The extent to which countries in the area are exposed to the same economic shocks.
If these three factors are present, then a common currency can help to promote economic growth and stability. This is because a common currency can help to reduce transaction costs, increase trade, and stabilize prices.
Examples of optimum currency areas
There are a number of examples of OCAs in the world today. The most well-known example is the euro area, which consists of 19 European countries that use the euro as their common currency. Other examples of OCAs include the United States, Canada, and Australia.
Criteria for an optimum currency area
There are a number of criteria that can be used to assess whether a group of countries would benefit from forming an OCA. These criteria include:
Factor mobility: The ability of factors of production, such as labor and capital, to move freely between countries. This is important because it helps to ensure that resources are allocated efficiently within the OCA.
Goods market integration: The degree to which goods and services can be freely traded between countries. This is important because it helps to prevent countries from experiencing large economic imbalances.
Symmetric shocks: The extent to which countries in the area are exposed to the same economic shocks. This is important because it helps to ensure that the common currency can be used to stabilize prices and promote economic growth.
Fiscal federalism: The ability of the OCA to pool resources and provide fiscal transfers to countries that are experiencing economic difficulties. This is important because it helps to ensure that no country is left behind in the event of an economic shock.
Conclusion
The concept of OCA is an important one in economics. It helps to explain why some groups of countries benefit from forming a common currency, while others do not. The criteria for an OCA can be used to assess whether a group of countries would benefit from forming a common currency.
In addition to the criteria mentioned above, there are a number of other factors that can affect the success of an OCA. These factors include the level of economic development, the political stability, and the willingness of countries to cooperate.
The euro area is an example of an OCA that has been successful in promoting economic growth and stability. However, the euro area has also experienced some challenges, such as the sovereign debt crisis in 2010. These challenges have highlighted the importance of fiscal federalism in an OCA.
The concept of OCA is still evolving, and there is no one-size-fits-all solution. However, the criteria for an OCA can be used to assess whether a group of countries would benefit from forming a common currency.
Optimum currency area Assignment Essay
RUBRIC | QUALITY OF RESPONSE | NO RESPONSE | POOR / UNSATISFACTORY | SATISFACTORY | GOOD | EXCELLENT | | Content (worth a maximum of 50% of the total points) | Zero points: Student failed to submit the final paper. | 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. | 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. | 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. | 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. | | Use of Sources (worth a maximum of 20% of the total points). | Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. | 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. | 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. | 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. | 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. | | Grammar (worth maximum of 20% of total points) | Zero points: Student failed to submit the final paper. | 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors | 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors | 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. | 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. | | Structure of the Paper (worth 10% of total points) | Zero points: Student failed to submit the final paper. | 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. | 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper | 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. | 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. |
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