The productivity commissions said a shared currency could reduce business costs, but pointed to Europe as an example of possible downsides.
The proposal was raised as part of a discussion paper examining ways to bolster economic integration.
The paper said the lower transaction costs of a single currency need to be weighed against mismatched business cycles such as the sudden boost to exports caused by the current Australian mining boom.
"On the one hand, there are potential benefits in avoiding the transaction costs associated with having separate currencies. On the other, where business cycles and economic changes affect the two countries differently, there could be costs in not having independent exchange rates," the paper said.
"The recent experience of countries in the euro zone is instructive in this respect."
While Australian lawmakers have occasionally entertained the prospect of a single currency, New Zealand's central bankers and politicians have tended to resist it, arguing that such a move would result in a relinquishing of the nation's monetary policy.
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