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Inflation Targeting in Latin America: Toward a Monetary Union?

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  • Marc Hofstetter

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Abstract

In recent years, five of the main economies in Latin America -Brazil, Chile, Mexico, Colombia and Peru- have adopted Inflation Targeting regimes. In the context of these converging monetary strategies, would the IT nations in the region be better off adopting a common currency? Would they be better off if they dollarize? Would a common currency be a better alternative than dollarization? The answers I give to these questions are yes, yes (except for Brazil) and maybe.

Suggested Citation

  • Marc Hofstetter, 2011. "Inflation Targeting in Latin America: Toward a Monetary Union?," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2011), pages 71-118, August.
  • Handle: RePEc:col:000425:009146
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    References listed on IDEAS

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    1. Kenneth Rogoff, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, Oxford University Press, vol. 100(4), pages 1169-1189.
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    14. Lin, Shu & Ye, Haichun, 2007. "Does inflation targeting really make a difference? Evaluating the treatment effect of inflation targeting in seven industrial countries," Journal of Monetary Economics, Elsevier, vol. 54(8), pages 2521-2533, November.
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    Cited by:

    1. Stephen McKnight & Marco Robles Sánchez, 2014. "Is a monetary union feasible for Latin America? Evidence from real effective exchange rates and interest rate pass-through levels," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 29(2), pages 225-262.
    2. Fortun Vargas, Jonathan, 2012. "Monetary dynamics in post inflation Bolivia," Revista Latinoamericana de Desarrollo Economico, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana, issue 18, pages 65-104, Noviembre.

    More about this item

    Keywords

    Monetary Union Inflation Targeting Latin America Monetary Policy;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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