to which industries and occupations are geographically segregated across regions ( theil and finizza, 1971 ). it compares the distribution of occupations or industries in each location to the national distribution. the index ranges from 0 to 1, with a higher value indicating more segregation and a lower value indicating more similarity. these estimates are constructed using single - digit industries and occupations. for more details, see kaplan g and s schulhofer - wohl ( 2017 ), ‘ understanding the long - run decline in interstate migration ’, international economic review, volume 58, issue 1, pp 57 – 94. 16 / 16 bis central bankers'speeches

the union to insure against the impact of asymmetric shocks since it provides opportunities for diversification of income sources. if members of the monetary union hold claims on other countries within the union, then the income effect of any asymmetric shocks would be mitigated. the introduction of the euro has helped make euro area financial markets more integrated. the money market has been almost perfectly integrated since the formation of monetary union. the significant growth of the euro corporate bond market also provides evidence of integration and widens the range of potential investors to which firms have access. national bonds and equity market returns exhibit closer co - movements than they did prior to the introduction of the euro. the main area where financial integration has lagged is that of retail banking where, in spite of an increase in cross - border mergers and acquisitions in recent years, cross - border activity remains relatively limited. forces for further integration will continue, as market participants increasingly exploit the new environment of monetary union. in addition, a number of initiatives, supported by the eurosystem and / or the commission, are further encouraging integration. an example is target2, the new payment platform for the financial system, which began operating in november 2007. as integration proceeds, we can expect that monetary transmission mechanisms across the euro area will continue to converge, helping the implementation of the single monetary policy and bringing the euro area closer to an optimum currency area. ronald mckinnon, in 1963, added the criterion of openness. the more open the economies of a monetary union, the less effective nominal exchange rate changes will be in facilitating adjustment because the changes are more likely to feed onto domestic prices and wages, offsetting the competitiveness gains. recent empirical evidence, however, has shown that a common currency ( as opposed to separate currencies tied together with fixed exchange rates ) can promote openness, or trade integration. the basic intuition underlying this view is that a set of national currencies is a significant barrier to trade. in addition to removing the costs of currency conversion, a single currency and a common monetary policy preclude future competitive devaluations, and facilitate foreign direct investment and the building of long - term relationships. these outcomes, in turn, can promote ( over - and - above what may have been attained on the basis of the elimination of exchange - rate uncertainty among separate currencies ) reciprocal trade, economic and financial integration, and the accumulation of knowledge. greater trade integration can increase growth by increasing alloca