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Entropy 2017, 19(6), 245; doi:10.3390/e19060245

Entropy Analysis of Monetary Unions

Faculdade de Economia, Nova School of Business and Economics, Campus de Campolide, Lisbon 1099-032, Portugal
Department of Electrical Engineering, Institute of Engineering, Polytechnic Institute of Porto, Porto 4249-015, Portugal
These authors contributed equally to this work.
Author to whom correspondence should be addressed.
Received: 4 March 2017 / Revised: 13 May 2017 / Accepted: 17 May 2017 / Published: 24 May 2017
(This article belongs to the Section Complexity)
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This paper is an exercise of quantitative dynamic analysis applied to bilateral relationships among partners within two monetary union case studies: the Portuguese escudo zone monetary union (EZMU) and the European euro zone monetary union (EMU). Real world data are tackled and measures that are usual in complex system analysis, such as entropy, mutual information, Canberra distance, and Jensen–Shannon divergence, are adopted. The emerging relationships are visualized by means of the multidimensional scaling and hierarchical clustering computational techniques. Results bring evidence on long-run stochastic dynamics that lead to asymmetric indebtedness mechanisms among the partners of a monetary union and sustainability difficulties. The consequences of unsustainability and disruption of monetary unions have high importance for the discussion on optimal currency areas from a geopolitical perspective. View Full-Text
Keywords: dynamics; mathematical models; synchronization; economics; entropy; Jensen–Shannon divergence; multidimensional scaling; hierarchical clustering dynamics; mathematical models; synchronization; economics; entropy; Jensen–Shannon divergence; multidimensional scaling; hierarchical clustering

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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Mata, M.E.; Machado, J.T. Entropy Analysis of Monetary Unions. Entropy 2017, 19, 245.

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