According to Mundell in an optimum currency area, the achievement of internal and external balance is…

Mundell's optimum-currency-area argument uses factor mobility, especially labour, to absorb asymmetric shocks when exchange-rate changes are unavailable. Capital flows alone, foreign-fund inflows and aid are not the full adjustment criterion. Capital flows Inflow of funds from abroad Official development assistance The mobility of factors Capital flows This alternative fails the selection criterion or distinction explained above. Inflow of funds from abroad This alternative fails the selection criterion or distinction explained above. Official development assistance This alternative fails the selection criterion or distinction explained above. The mobility of factors This is the derived selection under the stated interpretation.