In addition to removing the costs of currency conversion, a single currency and a common monetary policy preclude future competitive devaluations, and facilitate foreign direct investment and the building of long-term relationships.
These outcomes, in turn, can promote (over-and-above what may have been attained on the basis of the elimination of exchange-rate uncertainty among separate currencies) reciprocal trade, economic and financial integration, and the accumulation of knowledge. Greater trade integration can increase growth by increasing allocative efficiency and accelerating the transfer of knowledge.