What Macroeconomic Measures Are Needed for Free Trade to Flourish in the Western Hemisphere

Bibliographic Data

ID3016004
AuthorsBarry Eichengreen (0000-0002-1683-4486, corresponding author)
Year2004
Volume46
Issue2
Pages1-27
Publication date2004-01-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueLatin American Politics and Society (JOURNAL)
Journal identifiersISSN: 1531-426X • E-ISSN: 1548-2456
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1111/j.1548-2456.2004.tb00272.x
OpenAlexW4233490583
LanguageEN
Citations received1
References cited5

Recent experience has made clear the importance of macroeconomic stability, and exchange rate stability in particular, in generating support for regional integration. The tensions created by exchange-rate and financial volatility are clearly evident in the recent history of Mercosur and may also hinder the development of a Free Trade Area of the Americas. This essay argues that ambitious schemes for a single regional currency are not a practical response to this problem. Nor would a system of currency pegs or bands be sufficiently durable to provide a lasting solution. Instead, countries must solve this problem at home. In practice, this means adopting sound and stable monetary policies backed by a clear and coherent operating strategy, such as inflation targeting. With such policies in place, exchange rate volatility can be reduced to levels compatible with regional integration

Currency · Economics · Exchange rate · Financial economics · Financial Integration · Financial market · International economics · Macroeconomics · Monetary economics · Western hemisphere · Economic Theory and Policy · Global Financial Crisis and Policies · Monetary Policy and Economic Impact · Finance

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