Optimum filtering for optimum currency areas criteria

Ozer I., ÖZKAN İ.

ECONOMICS BULLETIN, vol.6, 2007 (ESCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 6
  • Publication Date: 2007
  • Journal Indexes: Emerging Sources Citation Index (ESCI), Scopus
  • Hacettepe University Affiliated: Yes


This study aims to analyze Turkey and the Economic and Monetary Union (EMU) countries in the light of criteria suggested by the optimum currency areas (OCA) theory and to compare the criteria obtained by an application of Hodrick-Prescott (H-P) and Baxter-King (B-K) filters. To this end, we follow a novel technique, fuzzy c-means (FCM) clustering with upper and lower levels of fuzziness. The results show that the application of the H-P filtering technique with appropriate smoothing parameter values produces sensible clusters.