Common Monetary Area's Formation Principles in the World; Advantages, Restrictions & Iran's Future Perspective, A Literature Review

Present article reviews the principles of Common Monetary Areas’ Formation & its experience in the world. In this study, the most important criteria of common monetary areas’ formation have been introduced according to modern & traditional views, likewise advantages & disadvantages of joining to a common monetary area is mentioned theoretically & some empirical considerations of common monetary areas in the world is expressed. In the next part, the criteria of common monetary areas’ formation have been compared in Iran & regional countries. Comparing these indicatives shows that in mid-time, Iran’s membership in a common monetary area will be probably unexpected because of the low rate of labor force & capital mobility in country, the low degree of national economy’s openness, loss of diversification in regional products, limited rate of intro-area trade, the low rate of Iran’s earnings correlation in comparing with frequent neighbor countries, high rate of inflation in country, different nature of shocks & asynchronous of commercial cycles. Under such a circumstances predominance of political considerations against commercial considerations could possibly stop or threaten its foundation & vitality.