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Single currency

A currency used by two or more countries. The decision on the amount to be issued may be determined by agreement between two or more national central banks, or by commissioning a single supra-national institution to issue the currency. If a single currency is issued independently by more than one national authority, without any agreement between them, it is likely that too much of it will be issued. This is because the initial gains from additional currency accrue to the nation that issues it, while the losses resulting from inflation following excessive issue of a currency are spread across all countries using it. See also optimum currency area.

Reference: Oxford Press Dictonary of Economics, 5th edt.