Monetary Integration Issues in Latin America: A Multivariate Assessment
This paper assesses the monetary consequences of the Latin-American integration process. Over the period 1991-2007, we analyze a sample of five Latin-American countries focusing on the feasibility of a monetary union between L.A. economies. To this end, we study the issue of business cycle synchronization with the occurrence of common shocks. First, we assess the international disturbances influence on the domestic business cycles. Second, we analyze the impact of the adoption of different exchange rate regimes on the countries' responses to shocks.
Key words: Business cycles, OCA, Bayesian VAR, Latin American countries.
JEL: C32, E32, F42.