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This paper draws on the first chapter of my Ph.D. dissertation at Harvard University. I am especially grateful to my advisors—Alberto Alesina, Jeffrey Frankel, and Dani Rodrik—for their guidance and support. I am also very grateful to Christopher Avery, Jorg Decressin, Andrew Feltenstein, Elhanan Helpman, Marc Melitz, Nolan Miller, and Andres Velasco, and to seminar participants at Harvard University and the IMF Institute for useful comments and suggestions. I wish to thank the Weatherhead Center for International Affairs at Harvard University for financial support. The views expressed in this paper are mine; they do not necessarily represent those of the IMF or IMF policy. All errors remain mine.
I refer here to the year euro began performing the three basic functions assigned to a currency: store of value, legal tender, and medium of exchange.
The group comprises Saudi Arabia, United Arab Emirates, Bahrain, Qatar, Oman, and Kuwait.
The five countries are: Ghana, Guinea, Nigeria, Sierra Leone, and The Gambia. Note that Liberia participated in the primary discussions on the creation of the union.
The group comprises the members of the existing Rand zone—South Africa, Lesotho, Swaziland, Namibia—and other countries such as Botswana, Malawi, Mauritius, Mozambique, Tanzania, and Zimbabwe. Zambia is expected to confirm its membership.
The ten countries that joined the EU on May 1st 2004 are Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia.