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Monetary and Exchange Rate Arrangements for Nafta
Author:
Mr. Barry J. Eichengreen null

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Mr. Tamim Bayoumi
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Series:
IMF Working Papers
Volume/Issue:
Volume 1993: Issue 020
Language:
English
Publication Date:
01 Mar 1993
DOI:
https://doi.org/10.5089/9781451843804.001
ISBN:
9781451843804
ISSN:
1018-5941
Pages:
54
Keywords:
WP; demand shock; single currency; supply curve; EC member country; exchange rate uncertainty; supply and demand disturbance; supply disturbance; aggregate supply supply curve; Supply shocks; Monetary unions; Exchange rates; Conventional peg; North America; Europe; Southern Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper considers the extent to which the North American Free Trade Area (NAFTA) meets the criteria for a common currency area. NAFTA is compared with the EC, a regional grouping for which initial plans for a monetary union are already in place. Most of the anticipated benefits from a monetary union in the EC apply with equal force to NAFTA. However, because the underlying disturbances are more diverse across members of NAFTA, the costs of abandoning the exchange rate instrument are likely to be higher. This is particularly true when NAFTA is compared to the EC’s continental core.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund