Austria-Hungary as an optimal currency area: A study of Austria-Hungary, 1867--191

The objective of this dissertation is to test the parameters of a monetary union using the old Austro-Hungarian Empire. The first chapter of the dissertation outlines the general framework of what is a monetary union and the criteria needed to achieve a monetary union. It also outlines how the investigation will occur. Chapter two explores the question of labor market integration. Using a gravity model, the Austro-Hungarian Empire's labor market integration is compared to that of a major European nation of the same time period, namely France. Chapter three covers the breadth and depth of the trading relationship of Austria and Hungary compared to that existing between several other leading nations. It also shows if the economies of Austria and Hungary were growing at a similar pace and checks if shocks were correlated. Chapter four deals with the question of capital market integration. It examines if interest changes in one region were mirrored by interest rate changes in other regions. Chapter five covers the question of the impact of the monetary union on the fiscal situation of the two nations and whether or not it had a negative impact or positive impact. In the conclusion, a finalized estimate is made concerning how Austria-Hungary fulfilled these criteria.