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External Vulnerabilities And Economic Integration: Is The Union Of South American Nations A Promising Project?

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  • ANDREA BONILLA BOLANOS

    (Universite de Lyon and Groupe d'Analyse et de Theorie Economique GATE LSE-CNRS, France)

Abstract

This study examines the reactions of the Union of South American Nations (UNASUR) economies to external shocks. By using a structural vector autoregression approach, it measures the impact of three external shocks (monetary, commercial, and financial) in the real, monetary, and fiscal economic sectors of seven UNASUR economies, namely Argentina, Bolivia, Brazil, Chile, Colombia, Peru, and Venezuela, and investigates co-movement paths. The results show a non-negligible degree of synchronization across the studied economies, confirming their high external vulnerability. They also suggest that irrespective of size or integration degree, all UNASUR members share mutual weaknesses, which they must fight to overcome.

Suggested Citation

  • Andrea Bonilla Bolanos, 2014. "External Vulnerabilities And Economic Integration: Is The Union Of South American Nations A Promising Project?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(2), pages 97-131, June.
    • Handle: RePEc:jed:journl:v:39:y:2014:i:2:p:97-131
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    More about this item

    Keywords

    Economic Integration; South America; Structural VAR; UNASUR;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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