Is a monetary union feasible for Latin America? Evidence from real effective exchange rates and interest rate pass-through levels
This paper assesses the feasibility of forming a common currency in Latin America. First, we examine the cointegration and Granger causality of real effective exchange rates and find evidence supporting a monetary union comprised of Argentina, Bolivia, Brazil, Chile, Colombia, Mexico, and Paraguay....
| Autores: | , |
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2014 |
| País: | México |
| Institución: | EL COLEGIO DE MÉXICO |
| Repositorio: | Estudios Económicos de El Colegio de México |
| Idioma: | inglés |
| OAI Identifier: | oai:oai.estudioseconomicos.colmex.mx:article/69 |
| Acceso en línea: | https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/69 |
| Access Level: | acceso abierto |
| Palabra clave: | monetary union cointegration granger causality interest rate pass-through monetary policy E43 E52 F15 F33 F36 unión monetaria cointegración causalidad de granger pass-through de tasa de interés política monetaria |
| Sumario: | This paper assesses the feasibility of forming a common currency in Latin America. First, we examine the cointegration and Granger causality of real effective exchange rates and find evidence supporting a monetary union comprised of Argentina, Bolivia, Brazil, Chile, Colombia, Mexico, and Paraguay. Second, we examine the degree of heterogeneity in the transmission of monetary policy within the hypothetical monetary union. Considerable asymmetries in the pass-through levels of interest rates are found to exist indicating the need for substantial reforms before a Latin American monetary union could take place. |
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