Optimum currency areas: EU case

The interest for optimum currency area theory (OCA), comes from the experience of European monetary union (EMU), development of academic thought, progress in economic theory and econometrics in sense of revaluation of national monetary and fiscal policies and endogenousity of OCA criteria. Sovereign debts in European Union (EU) and evident disparities between member states, raising the question of economic validity of EU in course of generating more costs then gains for member states. OCA theory can, to some extent, provide a framework, which can be used for giving the answer to previous question. OCA criteria are used for that analysis. In this paper, there is historical and theoretical description of origin of this theory, from Mundell - the author of this idea in 1961., as well as the evolution of this theory through the development of criteria and their analysis on EMU. These criteria are used for assessment is a country fit to join a OCA, as well the functioning of one OCA, like EMU or some new in the future.