Czech Feasibility Of Joining The Euro

The theory of Optimum Currency Area(OCA) is one of the most import topics in the international monetary economics.The European Monetary Union is the most successful example of currency unification,to which the OCA theory is well applied.In the past fifty years,the OCA theory has generally experienced two periods-one is for its emerging and prevalence in the 1960s,and the other is from late 1980s till now,when it is gaining popularity once again.Especially until recently years,the enlargement of the euro area to the East Europe has made the discussion of OCA even hotter.The discussion of OCA theory has been focused on two main topics:which countries are suitable to form a monetary union? And where is the boundary of the monetary union? These two questions have now applied to the accession of the central and eastern European countries into the euro area: which countries in the central and Eastern Europe are qualified to join the euro area? And where is the boundary of the euro area?More specifically,we analyze each single country.This article is to use the OCA theory to examine the qualification of Czech Republic's qualification to join the euro area,as an example of the central and eastern European countries.The article is also to do empirical study on Czech based on the convergence criteria of Maastricht Treaty.We have three main conclusions after the analysis:(1) The CEE countries are converging to the euro area, although in different developing paths;(2) Czech Republic basically satisfies the OCA criteria to join a monetary union;(3)There is increasing difficulty for Czech to fulfill the Convergence Criteria of Maastricht Treaty now and in the near future.And it is necessary for Czech to end the EDP procedure as soon as possible to gain the trust of the union.