Optimum currency area theory provides important insights on how the Eurozone might be redesigned

Optimum currency area theory (OCA) is a body of work that was seen as highly influential by the Eurozone’s creators. As Holly Snaith writes, it is often framed as providing a ‘checklist’ of ideal policies against which – it is usually claimed – the Eurozone does not match up. She argues that the theoretical contribution of OCA is considerably more complicated than this picture suggests. She posits that, depending on which strand of OCA is favoured, entirely different narratives emerge about what the Eurozone is, and how it should be governed.