Central European EU Accession and Latin American Integration: Mutual Lessons in Macro-Economic Policy Design
AbstractDesign options in exchange rate, monetary and fiscal policies, are explored for economies in Central Europe and Latin America that aspire to engage in monetary unification. Recent experience in these regions suggests that, absent a model of institutional harmonization and a road map for policy convergence, Latin American economies would benefit from following internally consistent macroeconomic policiesÂ—possibly in the context of a rules-based frameworkÂ—and from adopting widely accepted standards of best practice. Unilateral adoption of a hard currency (dollarization or euroization) tends to be counterproductive unless it is supported by fiscal discipline and wage flexibility. Empirical evidence is presented on the effect of expected monetary unification on sovereign risk.
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Bibliographic InfoPaper provided by Oesterreichische Nationalbank (Austrian Central Bank) in its series Working Papers with number 75.
Date of creation: 03 Oct 2002
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Postal: Oesterreichische Nationalbank, Economic Studies Division, c/o Beate Hofbauer-Berlakovich, POB 61, A-1011 Vienna, Austria
Find related papers by JEL classification:
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
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