8 A corollary of the argument raised by Mundell and McKinnon is that a similarity of shocks is not a strict prerequisite for sharing a single currency if all members of the currency area are financially integrated and hold claims on each other’s output. This point has important implications on the debate about the composition of a single currency area.
A common currency could be shared by countries subject to idiosyncratic shocks as long as they “insure” one another through private financial markets. On this subject there is a very interesting study which considers the US.