The chart below shows the overall index of integration for the three monetary unions included in our research. First, a significant increase in dispersion had already occurred in the USA and the Eurozone before 2007, but not in the UK. Second, a rise in the dispersion levels for all three currency unions can be observed during and after the Global Financial Crisis although, to varying degrees: On the one hand, while the trend line for the UK and the US after the crisis until 2017 are more or less similar, dispersion in the US has been exacerbated in the last three years whereas it has diminished in the UK. On the other hand, the trendline for dispersion in the Eurozone is extraordinarily steep between 2008 and  2012. Since then, it has stabilized but is still very far from the pre-2008-09 crisis levels. Interestingly, not only has the UK returned to the pre-crisis dispersion levels but has become even more integrated in 2018 than it was in 1999. The Eurozone has very high levels of dispersion as compared to the US.


Note: A higher value on the vertical axis means greater dispersion or less integration

Acknowledgments: We would like to thank the IIMR research assistants for their contribution to the update of the datasets needed to build up our indices; in particular, Shivani Pradhan, Ibrahim Hakim and Alessandro Venieri.

Authorship and how to quote: This is an IIMR project coordinated by Dr Juan Castaneda and based on his research with Professor Pedro Schwartz on this topic:

  • ‘How Functional is the Eurozone? An Index of European Economic Integration Through the Single Currency’. October 2017. Economic Affairs 37 (3).
  • ‘An optimality index of the single currency: internal asymmetries within the eurozone since 1999’. In Castaneda, Roselli and Wood (eds.): The Economics of Monetary Unions. Past Experiences and the Eurozone. Chapter 7. 2020. Routledge.