Commitment and the adoption of a common currency*
用多国世代交叠模型分析，指出货币联盟能降低交易成本和通胀，但各国独立行动会设置本地货币壁垒，导致这些好处难以实现。
In contrast to Mundell's inquiry on the optimality of currency areas, this article aims to understand under what circumstances a Pareto‐dominant monetary union will be established. Using a multicountry overlapping generations model, we highlight gains from monetary union arising from reduced transactions costs and lower inflation. Despite these gains, countries acting independently will impose barriers to exchange through local currency restrictions, thereby creating transactions costs and providing an incentive for inflation. Therefore, the gains from monetary union are most likely to be lost without collective effort.