Regional Monetary Agreements and the Challenge of Optimum Currency Zones (OMZs): A Lesson Worth Examining!

This paper analyses the issue of optimal currency areas, based on various studies, in particular that of Robert Mundell, which shows that the effectiveness of a monetary union is based on specific criteria: labour mobility, diversification of economies, degree of market openness, similarity of production structures and the ability to jointly manage transfers. In the light of this theory, we argue that neither the euro zone nor the CFA zone fully meet Mundell's criteria for an optimal currency area. Both regions are characterised by structural challenges that undermine their effectiveness as monetary unions.