Does a Monetary Union protect against foreign shocks? An assessment of Latin American integration using a Bayesian VAR

Jean-Pierre Allegret () and Alain Sand-Zantman ()
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Jean-Pierre Allegret: GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique
Alain Sand-Zantman: GATE - Groupe d'analyse et de théorie économique - UL2 - Université Lumière - Lyon 2 - ENS LSH - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper analyses the monetary consequences of the Latin-American trade integration process. We consider a sample of five countries –Argentina, Brazil, Chile, Mexico and Uruguay-spanning the period 1991-2007. The main question raised pertains to the feasibility of a monetary union between L.A. economies. To this end, we study whether this set of countries is characterized by business cycle synchronization with the occurrence of common shocks, a strong similarity in the adjustment process and the convergence of policy responses. We focus especially our attention on two points. First, we try to determine to what extent international disturbances influence the domestic business cycles through trade and/or financial channels. Second, we analyze the impact of the adoption of different exchange rate regimes on the countries' responses to shocks. All these features are the main issues in the literature relative to regional integration and OCA process.

Keywords: Key-words : Business Cycles; OCA; Bayesian VAR; Latin American Countries JEL Classification: C32; E32; F42 (search for similar items in EconPapers)
Date: 2009
Note: View the original document on HAL open archive server: https://hal.science/hal-01791864
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Citations: View citations in EconPapers (3)

Published in Journal of Policy Modeling, 2009, 31 (1), pp.102-118. ⟨10.1016/j.jpolmod.2008.09.002⟩

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Related works:
Working Paper: Does a Monetary Union protect again foreign shocks? An assessment of Latin American integration using a Bayesian VAR (2008)
Working Paper: Does a Monetary Union protect again foreign shocks? An assessment of Latin American integration using a Bayesian VAR (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01791864

DOI: 10.1016/j.jpolmod.2008.09.002

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