Thus, from the Mundellian perspective, the case for a common currency within a broad area is stronger, the greater the actual or potential economic and financial integration within the area; the greater the correlation of macroeconomic shocks among regions within the area; and the more effective the non-monetary shock absorbers, such as factor mobility.
Whether the nations that compose the European Monetary Union (EMU) form an optimal currency area in Mundell’s sense has been widely debated by researchers. For example, Barry Eichengreen argued early on (Eichengreen, 1992) that Europe was perhaps not well suited for a common currency on economic grounds (though he found the political motivations more compelling).