Journal of Computational Optimization in Economics and Finance ISSN: 1941-3971 Volume 5, Number 1 © Nova Science Publishers, Inc. OPTIMUM CURRENCY AREAS WITHIN THE US AND CANADA: A DATA ANALYSIS APPROACH Efthimia Chrysanthidou, Periklis Gogas, and Theophilos Papadimitriou  ABSTRACT Over the last few decades Robert Mundell’s theory (1963) of Optimum Currency Areas (OCA) has attracted significant attention between researchers and policy makers especially after the formation of the European Monetary Union and the debate over whether the eurozone countries actually consist an OCA. In this paper, we take this debate to the area that was originally the subject of Mundell’s motivation: the US and Canada. We employ the methodology of Correspondence Analysis and Hierarchical Cluster Analysis, in a sample of macroeconomic data from the fifty US states and the ten Canadian provinces for 2009 in an effort to investigate whether the current currency split between north (Canada) and south (the US) is an OCA or possibly another split may be more appropriate. Our results show that three OCAs are identified within US states and Canadian provinces: one that includes regions of eastern US and Canada, one that includes regions of central-eastern and eastern US and Canada and finally one with regions of western US and Canada. Keywords: Optimum Currency areas; Correspondence Analysis; Hierarchical Cluster Analysis 1. INTRODUCTION During the last decades there have been several attempts from different groups of countries to adopt a common currency. The reason for this is that a monetary integration would eliminate currency risk resulting in favorable conditions for trade and business within the monetary union. This will result in increased efficiency by reducing hedging and uncertainty costs and optimum factor allocation.  Corresponding Author: Theophilos Papadimitriou, Democritus University of Thrace, Int. Economic Relations and Development Dept, Komotini Campus, 69100, Greece, Phone: +306976409712, fax: +302531039830, email: papadimi@ierd.duth.gr web: http://www.ierd.duth.gr/en/index.php?cid=65andst=1