Even more oddly, Mr Mundell believes that the planet as a whole is an optimal currency area.
Quite simply because it has been imposed on something which is not anywhere close to being an optimal currency area.
Oddly, however, Mr Mundell very strongly believes that Europe is, in practice if not in theory, an optimal currency area.
And the unfortunate thing is that even that second solution would still take decades upon decades to actually create and optimal currency area.
Economists who have looked at Europe, asking, in the manner of Mr Mundell, whether it is an optimal currency area, usually answer No.
And for a common currency to work it must be applied across something which is at least close to being an optimal currency area.
An optimal currency area would require convergence on monetary, fiscal, exchange rate, and political policies, which in turn would lead to productivity and growth rate convergence, explained Roubini.
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If you accept the logic of the optimal currency area approach, the world requires a proliferation of currencies, so that every area subject to shocks has its own.
So, to be an optimal currency area it is necessary that interest rates, as determined by the Taylor Rule, are desirably the same in all areas of that currency zone.
Even before the euro was adopted, in 1999, it was clear that neither the EU nor the 12-member subset that has joined the monetary union was an optimal currency area.
And here we get to the ritual incantation: the eurozone simply is not an optimal curency area and thus it should not have the same currency.
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