Is Latin America an Optimal Currency Area? Evidence from a Structural Vector Auto-regression analysis
This 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.
|Date of creation:||Aug 2007|
|Date of revision:||Apr 2008|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alberto Alesina & Robert J. Barro, 2002.
The Quarterly Journal of Economics,
Oxford University Press, vol. 117(2), pages 409-436.
- Alberto Alesina & Robert J. Barro, 2000. "Currency Unions," NBER Working Papers 7927, National Bureau of Economic Research, Inc.
- Barro, Robert & Alesina, Alberto, 2002. "Currency Unions," Scholarly Articles 4551795, Harvard University Department of Economics.
- Escaith, Hubert & Paunovic, Igor, 2003. "Regional integration in Latin America and dynamic gains from macroeconomic cooperation," Macroeconomía del Desarrollo 24, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
- M.J. Artis, 2003. "Reflections on the optimal currency area (OCA) criteria in the light of EMU," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 8(4), pages 297-307.
- Michael J. Artis, 2002. "Reflections on the Optimal Currency Area (OCA) criteria in the light of EMU," Working Papers 69, Oesterreichische Nationalbank (Austrian Central Bank).
- M.J. Artis, 2002. "Reflections on the Optimal Currency Area (oca) Criteria in the Light of EMU," Working Papers Central Bank of Chile 193, Central Bank of Chile.
- Tamim Bayoumi & Barry Eichengreen, 1992. "Shocking Aspects of European Monetary Unification," NBER Working Papers 3949, National Bureau of Economic Research, Inc.
- Bayoumi, Tamim & Eichengreen, Barry, 1992. "Shocking Aspects of European Monetary Unification," CEPR Discussion Papers 643, C.E.P.R. Discussion Papers.
- Tamim Bayoumi and Barry Eichengreen., 1992. "Shocking Aspects of European Monetary Unification," Economics Working Papers 92-187, University of California at Berkeley.
- Ralf Kronberger, 2004. "A Cost-Benefit Analysis of a Monetary Union for MERCOSUR with Particular Emphasis on the Optimum Currency Area Theory?," Macroeconomics 0407010, EconWPA.
- Zhang, Zhaoyong & Sato, Kiyotaka & McAleer, Michael, 2004. "Asian monetary integration: a structural VAR approach," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 64(3), pages 447-458.
- Zhaoyong Zhang & Kiyotaka Sato & Michael McAleer, 2003. "Asian Monetary Integration: A Structural VAR Approach," CIRJE F-Series CIRJE-F-212, CIRJE, Faculty of Economics, University of Tokyo.
- Larrain Felipe & Jose Tavares, 2003. "Regional Currencies Versus Dollarization: Options for Asia and the Americas," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(1), pages 35-49.
- 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,.
- Bénédicte Vidaillet & V. D'Estaintot & P. Abécassis, 2005. "Introduction," Post-Print hal-00287137, HAL.
- 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.
- John Hawkins & Marc Klau, 2005. "Financial Markets Aspects of Regional Currency Areas," Chapters,in: Regional Currency Areas in Financial Globalization, chapter 1 Edward Elgar Publishing. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:2961. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.