Problem
A. Outline in detail how a single currency area such as that of the Euro comes to be. What are the advantages and disadvantages of a system like this? Should we expect it to persist?
B. Suppose a country chooses to restrict the flow of capital, imposing some level of capital controls. What information is revealed about the expectations of that country? What does that E us about the state of the rest of the world? What do the strength of the controls signal?