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Is Mercosur an optimum currency area? An assessment using generalized purchasing power parity

Author

Listed:
  • Sergio Da Silva

    (Department of Economics, Federal University of Santa Catarina)

  • Leandro Stocco

    (Department of Economics, University of Sao Paulo)

  • J. Anchieta Neves

    (Petrobras)

Abstract

We consider the cointegration approach of generalized purchasing power parity to show that a necessary condition for Mercosur to be an optimum currency area is met. Yet there are still large cross-country differences as to cast doubt on the success of either monetary union or official dollarization. The PPP puzzle is also found to occur in Mercosur.

Suggested Citation

  • Sergio Da Silva & Leandro Stocco & J. Anchieta Neves, 2008. "Is Mercosur an optimum currency area? An assessment using generalized purchasing power parity," Economics Bulletin, AccessEcon, vol. 6(29), pages 1-13.
    • Handle: RePEc:ebl:ecbull:eb-08f30044
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    References listed on IDEAS

    as
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    Cited by:

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