The Political Economy of Currency Unions

# Replication Package for "The Political Economy of Currency Unions"

## Author
Kai Arvai

## Requirements
- Software: Matlab R2021A
- Toolboxes: Econometrics Toolbox, Optimization Toolbox, Global Optimization Toolbox
- run on Windows 10
- Computation time: Around 48h

## Instructions
1. **Setup**: Ensure all required software is installed.
2. **Run the main script**:
- Run `Main.m` to generate all tables and figures. This can take multiple hours.

## Folder Structure
- Figures_Tables contains all generated figures and tables
- Functions contains all functions used bu the main file
- Input_data contains the GDP data used to construct empirical moments
- Output_data contains the data generated by the matlab file
- Codes contains individual matlab files that create the main graphs and data

## Codes
- GDP_Correlation reads in the GDP data and creates the empirical moments and Figure B1 in the Appendix [this takes a few seconds]
- Estim_Markov generates Table 1 and the parameters used to simulate the shock process. It saves Model_Markov, a seed is set as a default, the folder Output_data already contains a Model_Markov_09072023 as a default. [this takes a few minutes]
- Model_Simulation generates Table 2 and Figure 1 and Figure B2, B3. [this can take several hours]
- Model_Simulation_asym generates Figure 4 and Figure B4. [this can take several hours]
- Sust_Frontier_2Country generates Figure 2, and Figure 3b 3c and 3d [this can take several hours]
- Three_Estim_Markov generates the parameters to simulate the shock process for the three country extension and gives the numbers in Appendix B.6. [this takes a few minutes]
- Sust_Frontier_3Country generates the sustainability frontiers in Figure 3a [this can take one hour]
- Duration creates Figure B5 [this takes by far the longest]
- Duration_monoton creates Figure B6 [this can take several hours]

## Contact
For any questions, please contact: [e-mail]