Monetary Union: European Lessons, Latin American Prospects

Eduard Hochreiter, Klaus Schmidt-Hebbel and Georg Winckler

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: In this paper selective issues of long-run sustainability of monetary unions are analyzed. Using theoretical insights and the experience of EMU up to now we argue that empirical evidence on OCA criteria for EMU suggests that benefits for the countries participating in EMU outweigh costs by a relatively large margin although by varying degrees from country to country. We also conclude that the Stability Pact is a sufficient but not a necessary condition for EMU to succeed and that EMU has been driven by political considerations. A sound financial sector is a precondition. With regard to lessons to be drawn for Latin America and the Caribbean we first find that there has been a strong push towards the floating cum inflation-targeting corner and to regional trade integration. Moreover, it seems that, in contrast to EMU, the benefit-cost balance of a move to monetary union is much less favorable in Latin America and the Caribbean and, most important, the political dimension missing.

Date: 2002-07
New Economics Papers: this item is included in nep-eec, nep-ifn and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
https://www.bcentral.cl/documents/33528/133326/DTBC_167.pdf (application/pdf)

Related works:
Journal Article: Monetary union: European lessons, Latin American prospects (2002)
Working Paper: Monetary Union: European Lessons, Latin American Prospects (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:167

Access Statistics for this paper

More papers in Working Papers Central Bank of Chile from Central Bank of Chile Contact information at EDIRC.
Bibliographic data for series maintained by Alvaro Castillo ().