"A reader-friendly little book full of refereed, but largely the authors own empirical analyses. Some of their results are as expected, others are surprising, and some of them will give rise to controversial discussions. They pose a challenge for proponents and critics of the euro and the institutional arrangements of the EMU. Worth reading for all of them." -- Dr. Johannes Schneider , Catholic University Eichstätt-Ingolstadt "A common currency is more desirable the more symmetric are the macroeconomic shocks of its member countries. In their excellent new book, Dreyer and Schmid address this fundamental proposition both theoretically and empirically. They begin with a lucid survey of the macroeconomic consequences of symmetric and asymmetric shocks in the classic theory of optimal currency areas.

They then implement the theory empirically to identify exactly which factors contribute to the synchronization of business cycles in the Euro Area. Advocates of the Euro will be relieved to learn that business cycles in the Euro-area are more synchronized than in the United States. They also suggest policies that the Euro-area can implement to strengthen synchronization. The book is well written, uses state-of-the-art econometrics, and has important implications for policy. It should be accessible to researchers, graduate students in economics, and policymakers." -- William T. Smith , Ph.D.

, Department of Economics, University of Memphis "Dreyer and Schmid present an insightful look into the creation of currency areas with emphasis on the Euro. They discuss factors and conditions necessary for its success and identify areas for improvement. The book is a must read for anyone interested in macroeconomics and currencies, especially academics and policy makers ." -- Vivek Sharma , Ph.D., Department of Economics, University of Memphis.