Is Latin America an Optimum Currency Area? Evidence from a Structural Vector Autoregression Analysis
AbstractThis paper evaluates the advisability of a monetary union in Latin America applying the theory of optimum currency areas (OCA). The analysis is based on the traditional OCA criteria and it suggests that there is no evidence for any monetary integration in Latin America even at a sub-regional level. Latin American countries have evidenced a low degree of trade integration and asymmetric co-movements among their shocks. Moreover, substantial differences in the speed of adjustment and in the size of shocks are found. Hence, higher policy coordination seems to be necessary before starting any economic integration process in Latin America.
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Bibliographic InfoArticle provided by FrancoAngeli Editore in its journal STUDI ECONOMICI.
Volume (Year): LXVI (2011)
Issue (Month): 104 ()
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Web page: http://www.francoangeli.it/riviste/sommario.asp?IDRivista=59
Find related papers by JEL classification:
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
- F15 - International Economics - - Trade - - - Economic Integration
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
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