What I am saying of the euro area could apply to most currency areas. But participation in our monetary union has different characteristics to participation in other political unions. This is particularly because we operate in an environment where there are no permanent fiscal transfers between countries. 3 And this has important consequences.
In all national economies, permanent transfers take place from richer to poorer regions; from more densely populated to more sparsely populated areas; and from those better endowed with natural resources to those less endowed. This is true in the United States, where those transfers occur through the federal budget. It is true within Germany, within Italy, within Finland.