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Is EMU a Blueprint for Mercosur?

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  • Eduardo Levy
  • Federico Sturzenegger

Abstract

In this paper, we explore the advantages and disadvantages of a monetary union between Mercosur countries in light of the recent European experience. We address the issue both from the perspective of the traditional optimal currency area (OCA) theory as w

Suggested Citation

  • Eduardo Levy & Federico Sturzenegger, 2000. "Is EMU a Blueprint for Mercosur?," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 37(110), pages 63-99.
  • Handle: RePEc:ioe:cuadec:v:37:y:2000:i:110:p:63-99
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    File URL: http://www.economia.uc.cl/docs/110levya.pdf
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    References listed on IDEAS

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    1. Barry Eichengreen., 1998. "Does Mercosur Need a Single Currency?," Center for International and Development Economics Research (CIDER) Working Papers C98-103, University of California at Berkeley.
    2. Yeats,Alexander James, 1997. "Does Mercosur's trade performance raise concerns about the effects of regional trade arrangements?," Policy Research Working Paper Series 1729, The World Bank.
    3. Eichengreen, Barry, 1993. "European Monetary Unification," Journal of Economic Literature, American Economic Association, pages 1321-1357.
    4. Barry Eichengreen, 1998. "Does Mercosur Need a Single Currency," NBER Working Papers 6821, National Bureau of Economic Research, Inc.
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    6. Fischer, Stanley, 1982. "Seigniorage and the Case for a National Money," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 295-313, April.
    7. Robert N. McCauley & William R. White, 1997. "The Euro and European financial markets," BIS Working Papers 41, Bank for International Settlements.
    8. Tamim Bayoumi, 1992. "The Effect of the ERM on Participating Economies," IMF Staff Papers, Palgrave Macmillan, vol. 39(2), pages 330-356, June.
    9. Edward J. Kane, 1998. "Capital movements, asset values, and banking policy in globalized markets," Proceedings 606, Federal Reserve Bank of Chicago.
    10. Eduardo Levy Yeyati & Alain Ize, 1998. "Dollarization of Financial Intermediation; Causes and Policy Implications," IMF Working Papers 98/28, International Monetary Fund.
    11. Mariano Tommasi & Mark P. Jones & Pablo Sanguinetti, 1997. "Politics, Institutions, and Fiscal Performance in the Argentine Provinces," Working Papers 16, Universidad de San Andres, Departamento de Economia, revised Apr 2000.
    12. Edward J. Kane, 1998. "Capital movements, asset values, and banking policy in globalized markets," Proceedings 606, Federal Reserve Bank of Chicago.
    13. Federico Sturzenegger & Mariano Tommasi (ed.), 1998. "The Political Economy of Reform," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262194007, January.
    14. Maurice Obstfeld, 1997. "Europe's Gamble," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, pages 241-317.
    15. Norman Loayza & J. Humberto Lopez & Angel J. Ubide, 1999. "Sectorial Macroeconomic Interdependencies; Evidence for Latin America, East Asia and Europe," IMF Working Papers 99/11, International Monetary Fund.
    16. Rudiger Dornbusch & Ferico Sturzenegger & Holger Wolf, 1990. "Extreme Inflation: Dynamics and Stabilization," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, pages 1-84.
    17. Bayoumi, T. & Eichengreen, B., 1994. "One Money or Many? Analysing the Prospects for Monetary Unification in Various Parts of the World," Princeton Studies in International Economics 76, International Economics Section, Departement of Economics Princeton University,.
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    Citations

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    Cited by:

    1. Foresti, Pasquale, 2007. "Is Latin America an Optimal Currency Area? Evidence from a Structural Vector Auto-regression analysis," MPRA Paper 2961, University Library of Munich, Germany, revised Apr 2008.
    2. Jean-Pierre Allegret & Alain Sand-Zantman, 2007. "Transmission des chocs et mécanismes d'ajustement dans le Mercosur," Revue de l'OFCE, Presses de Sciences-Po, vol. 101(2), pages 355-392.
    3. Belke, Ansgar & Gros, Daniel, 2002. "Monetary integration in the Southern Cone," The North American Journal of Economics and Finance, Elsevier, vol. 13(3), pages 323-349, December.
    4. Vittorio Corbo & Klaus Schmidt-Hebbel, 2001. "Inflation Targeting in Latin America," Working Papers Central Bank of Chile 105, Central Bank of Chile.
    5. Camarero, Mariam & Flores, Renato Jr. & Tamarit, Cecilio R., 2006. "Monetary union and productivity differences in Mercosur countries," Journal of Policy Modeling, Elsevier, pages 53-66.
    6. Corbo, Vittorio, 2002. "Exchange Rate Regimes in the Americas: Is Dollarization the Solution?," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 20(S1), pages 91-111, December.
    7. Juan Carlos Cuestas & Javier Ordóñez, 2007. "Testing for convergence among Mercosur countries," Working Papers 2007/1, Nottingham Trent University, Nottingham Business School, Economics Division.
    8. Hochreiter, Eduard & Schmidt-Hebbel, Klaus & Winckler, Georg, 2002. "Monetary union: European lessons, Latin American prospects," The North American Journal of Economics and Finance, Elsevier, pages 297-321.
    9. Sophie Chauvin, 2001. "Exit Options for Argentina with a Special Focus on Their Impact on External Trade," Working Papers 2001-07, CEPII research center.
    10. Camarero, Mariam, & Flôres, R. & C. Tamarit, 2002. "Time series evidence of international output convergence in Mercosur," Computing in Economics and Finance 2002 87, Society for Computational Economics.
    11. William C. Gruben & Mark A. Wynne & Carlos E.J.M. Zarazaga, 2001. "Dollarization and monetary unions: implementation guidelines," Center for Latin America Working Papers 0201, Federal Reserve Bank of Dallas.
    12. Christian Rohe, 2016. "On shock symmetry in South America: New evidence from intra-Brazilian real exchange rates," CQE Working Papers 5316, Center for Quantitative Economics (CQE), University of Muenster.
    13. Mejia-Reyes, P., 2004. "Classical Business Cycles in America: Are National Business Cycles Synchronised?," International Journal of Applied Econometrics and Quantitative Studies, Euro-American Association of Economic Development, vol. 1(3), pages 75-102.
    14. Ansgar Belke & Kai Geisslreither & Daniel Gros, 2004. "On the Relationship Between Exchange Rates and Interest Rates: Evidence from the Southern Cone," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., pages 35-64.
    15. Ansgar Belke & Kai Geisslreither & Daniel Gros, 2004. "On the Relationship Between Exchange Rates and Interest Rates: Evidence from the Southern Cone," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., pages 35-64.
    16. Jorge Eduardo Carrera & Mariano Feliz & Demian Panigo & Marcelo Saavedra, 2001. "Dollarization as an Asymmetric Monetary Union. The Case of Argentina," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 043, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].

    More about this item

    Keywords

    Currency union; dollarization; Mercosur; EMU;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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