The theory of optimum currency areas says, in brief, that countries face a tradeoff between convenience and adjustment.

FORBES: Links 25 March: Sense In Cyprus, How To Deal With Both Deposit Insurance And Moral Hazard

The resulting "optimum currency area" theory boils down to a handful of tests.

WSJ: Troubles in Euro Zone Offer Chance to Fix Its Flaws

Neoclassical economic theory says that optimum results are achieved when the relation is close.

FORBES: The Baseball Enigma