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External vulnerabilities and economic integration. Is the Union of South American Nations a promising project?

  • Andrea Bonilla Bolanos

    ()

    (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France)

This article addresses the reactions of the Union of South American Nations (UNASUR) economies to external shocks. Because it was conceived as a political alliance, the UNASUR is likely to be a promising integration project. Thus, assessing the union from an economic perspective is essential. Using a structural vector autoregression (SVAR) approach, this study assesses the external monetary, commercial and -financial vulnerability of the bloc members, together with their preferences for stabilization tools (monetary or fi-scal instruments) and the level of convergence. The results reveal mutual weaknesses to overcome and a considerable synchronization level within the UNASUR. Evidence of positive integration prospects is found.

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Paper provided by Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure in its series Working Papers with number 1238.

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Date of creation: 2012
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Handle: RePEc:gat:wpaper:1238
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