Does Mercosur Need a Single Currency / Barry Eichengreen.

By:

Eichengreen, Barry

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w6821.Publication details: Cambridge, Mass. National Bureau of Economic Research 1998.Description: 1 online resource: illustrations (black and white)Subject(s):

Online resources:

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Abstract: The possibility of a single currency for the Mercosur countries was raised by Argentine President Menem in December 1997 and again at the regional summit this past June. This paper argues that whether Mercosur needs a common currency depends on what kind of integrated regional market its architects are creating. A customs union can be sustained despite the existence of separate national currencies that fluctuate against one another. But deeper integration extending beyond the border implies even more open domestic markets and more intense cross-border competition, making exchange-rate changes more disruptive. If South American policy makers intend to press ahead to deeper integration, then they like their European counterparts may have to contemplate monetary integration.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w6821 (Browse shelf(Opens below))	Not For Loan

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December 1998.

The possibility of a single currency for the Mercosur countries was raised by Argentine President Menem in December 1997 and again at the regional summit this past June. This paper argues that whether Mercosur needs a common currency depends on what kind of integrated regional market its architects are creating. A customs union can be sustained despite the existence of separate national currencies that fluctuate against one another. But deeper integration extending beyond the border implies even more open domestic markets and more intense cross-border competition, making exchange-rate changes more disruptive. If South American policy makers intend to press ahead to deeper integration, then they like their European counterparts may have to contemplate monetary integration.