IMF Working Papers Volume 2002 Issue 211: An Evaluation of Monetary Regime Options for Latin America (2002)

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An Evaluation of Monetary Regime Options for Latin America

Author:

Mr. Andrew Berg

Mr. Andrew Berg
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Mr. Paolo Mauro

Mr. Paolo Mauro
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Mr. Eduardo Borensztein

Mr. Eduardo Borensztein
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Series:: IMF Working Papers

Volume/Issue:: Volume 2002: Issue 211

Language:: English

Publication Date:: 01 Dec 2002

DOI:: https://doi.org/10.5089/9781451874853.001

ISBN:: 9781451874853

ISSN:: 1018-5941

Pages:: 40

Keywords:: WP; regime; exchange rate; country; exchange rate regimes; currency union; dollarization; common currency; inflation pass-through; inflation rate; inflation stabilization objective; nominal interest rate; floating exchange rate regime; unit of account; Exchange rates; Currencies; Inflation; Exchange rate arrangements; Floating exchange rates; Central America; South America; East Asia; Western 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.

Series:: IMF Working Papers

Volume/Issue:: Volume 2002: Issue 211

Language:: English

Publication Date:: 01 Dec 2002

DOI:: https://doi.org/10.5089/9781451874853.001

ISBN:: 9781451874853

ISSN:: 1018-5941

Pages:: 40

Keywords:: WP; regime; exchange rate; country; exchange rate regimes; currency union; dollarization; common currency; inflation pass-through; inflation rate; inflation stabilization objective; nominal interest rate; floating exchange rate regime; unit of account; Exchange rates; Currencies; Inflation; Exchange rate arrangements; Floating exchange rates; Central America; South America; East Asia; Western 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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We assess monetary regime options for Latin American countries. The costs of a common currency are likely to outweigh its benefits, as those countries face diverse economic shocks, do not trade much with each other, and are affected by common international financial shocks only to the same extent as the average pair of emerging markets. Unilateral dollarization would be desirable only for those countries where there are strong links to the U.S. economy, the credibility of the monetary authorities is irreversibly lost, and there is keen demand for dollar-denominated financial assets. Finally, some countries in the region seem to be good candidates for meaningful and useful floating.

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IMF Working Papers

ISSN:: 1018-5941

Publisher:: International Monetary Fund

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