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  AbstractThispapersurveystheoptimumcurrencyarea(OCA)literature.Itisorganisedintofourphases:the“pioneeringphase”whichputforwardtheOCAtheoryanditsproperties,the“reconciliationphase”whenitsdiversefacetswerecombined,the“reassessmentphase”thatledtothe“newOCAtheory,”andthe“empiricalphase”duringwhichthetheorywassubjecttodueempiricalscrutiny.WemakesystematicreferencetotheEuropeaneconomicandmonetaryunion(EMU)towhichtheOCAtheoryhasbeenmostfrequentlyapplied.Allpioneeringcontributionsarestillrelevant.Severalearlyweaknesseshavenowbeenamended.Meanwhile,thebalanceofjudgementshasshiftedinfavourofcurrencyunions.Theyarenowdeemedtogeneratefewercostsintermsofthelossofautonomyofdomesticmacroeconomicpolicies,andthereisgreateremphasisonthebenefits.Lookingaheadweareconfrontedwithtwodistinctparadigms--specialisationversus“endogeneityofOCA.”JELclassification:E42,F15,F33andF41.Keyword:OptimumCurrencyArea,EconomicandMonetaryIntegration,InternationalMonetaryArrangements,andEMU
 Non-TechnicalSummaryThispapersurveystheliteratureontheoptimumcurrencyarea(OCA)theory.Itisorganisedintofourmainphases.Thefirstisthe“pioneeringphase”fromtheearly1960stotheearly1970s.TheachievementofthisphasewastoputforwardtheOCAproperties,startthedebateonthebordersofacurrencyarea,andinitiatetheanalysisofthebenefitsandcostsfrommonetaryintegration.TheOCApropertiesinclude:themobilityoflabourandotherfactorsofproduction,priceandwageflexibility,economicopenness,anddiversificationinproductionandconsumption,similarityininflationrates,fiscalintegrationandpoliticalintegration.Thesimilarityofshockandcorrelationofincomeswasaddedlater.Sharingthesepropertiesreducestheusefulnessofnominalexchangerateadjustmentswithinthecurrencyarea.ThemaindrawbackofthepioneeringphasewasthatitwasdifficulttoweighandreconcilethediverseOCApropertiesasaunifyingframeworkwasmissing.AlsomostOCApropertieshadnoclearempiricalcontentyet.Inthe“reconciliationphase”duringthe1970s,asecondsetofcontributionsjointlyexaminedtheOCAproperties.Thisrepresentedanimportantadvancementaspropertiesstartedtobeanalysedandweighedwithoneanothertogaugetheirrelativeimportance.Thisphasealsoprovidedseveralnewinsights,anew“meta-property”(i.e.,thesimilarityofshocks),andgavemorestructuretotheanalysisofthecostsandbenefits.However,mostOCApropertiescontinuedtolackanempiricalcontent.Afterthesetwophases,thedevelopmentoftheOCAtheorylostsomemomentum.Inparticular,therewereaproblemofinconclusiveness,asOCApropertiesmaypointindifferentdirections,aweakeningoftheanalyticalframeworkbehindtheOCAtheorythusfar,andaslow-downintheprocessofEuropeanmonetaryintegration.However,graduallyseveraltheoreticalandempiricaladvancementsleadtoareassessmentoftheOCAtheoryandofthemainbenefitsandcostsfrommonetaryunification.Thebalanceofjudgementsshiftedinfavourofcurrencyunions.Associationtoacurrencyunionisnowdeemedtogeneratefewercostsintermsofthelossofautonomyofdomesticmacroeconomicpolicies.Thereisnowalsomoreemphasisonthebenefitsofcurrencyareas.SomeOCApropertieswerereinterpreted.This“reassessmentphase”ofthe1980sandearly1990sledtothe“newtheoryofoptimumcurrencyarea.”Inthesecond