Abstract

We use a data set covering the whole period of Argentina's currency board and most of that spanned by the Mercosur trade agreement to examine the case for either a Latin American monetary union or monetary union with the USA (through official dollarization). Our econometric evidence using VAR techniques indicates that macroeconomic shocks are still so highly asymmetric in Latin America and between Latin American countries and the USA as to make monetary union or official dollarization somewhat doubtful policies.

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