Eurozone from the view of OCA theory: conclusion for the Czech Republic

This diploma thesis is concerned with the Robert Mundell's theory of optimum currency area (OCA) and its relation to European monetary union (EMU) or (if you like) Eurozone. The OCA theory belongs to one of the most comprehensive approach to evaluate whether adoption of a common currency by a certain block of countries is beneficial of not. Thus this paper tries to apply OCA theory to the current Eurozone member countries and is focused especially on three main attributes -- the symmetry of economic shocks, the labor market flexibility and the economic integration of international trade between the member states of the euro area. Results of this analysis are then applied to the new member states and the immediate candidate EU member states -- especially to the Czech Republic. The work assesses the feasibility of the OCA theory for classification the candidate countries and their readiness for entering the Eurozone and finally offers alternative criteria by which the readiness for adoption of the Euro should be measured. The text is based on available theoretical and empirical sources supplemented by the author's analyses.