Is Latin America an Optimal Currency Area? Evidence from a Structural Vector Auto-regression analysis
AbstractThis paper evaluates the advisability of a monetary union in Latin America applying the theory of optimum currency areas (OCA). The analysis, based on the traditional OCA criteria, 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, important differences in the speed of adjustment and size of shocks are found. Higher policy coordination seems to be necessary before starting any economic integration process in Latin America.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2961.
Date of creation: Aug 2007
Date of revision: Apr 2008
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- F0 - International Economics - - General
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