Title

Regional Currency Arrangements in North America

Document Type

Article

Department

Economics (CMC)

Publication Date

2006

Abstract

Choosing an exchange-rate regime is largely a matter of choosing the variables that will bear the brunt of adjustment to shocks and disturbances. Floating rates, supported by inflation-targeting regimes of varying degrees of transparency, have dominated currency arrangements in North America, especially after the peso crisis of 1994. Although the member countries have pursued their policy goals without formal coordination, their objectives have been very similar. Meanwhile, de facto integration of the three economies has continued, especially in the realm of cross-border production sharing. The result has been reduction of asymmetries and convergence of business cycles, as well as changes in balance of payments behavior and in the sensitivity of trade to the exchange rate. This paper explores the implications for monetary union.

Rights Information

Copyright © 2006 Springer, Part of Springer Science+Business Media

Terms of Use & License Information

Terms of Use for work posted in Scholarship@Claremont.