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Economic Integration in Latin America

Author

Listed:
  • Basnet, Hem C.

    (Chadron State College)

  • Sharma, Subhash C.

    (Southern Illinois University)

Abstract

This study examines the feasibility of economic integration in Latin America. We analyze the existence of the long-term and short-term common movements among key macro variables—real GDP, intra-regional trade, private investment and consumption—in the seven largest economies in Latin America—Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela. The joint behavior of the long term trends and the joint response to transitory shocks suggest a significant degree of economic synchronization among these countries. Our results reveal that the economic fluctuations in these countries follow a similar pattern in terms of duration, intensity, response, and timing both in the long run and in the short run. The findings suggest that the group of seven economies in Latin America can lead the path of integration in the region more smoothly as macroeconomic conditions are favorable for them to do so.

Suggested Citation

  • Basnet, Hem C. & Sharma, Subhash C., 2013. "Economic Integration in Latin America," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 28, pages 551-579.
    • Handle: RePEc:ris:integr:0614
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    Citations

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    Cited by:

    1. Rabanal, Cristian, 2017. "Sincronización cíclica en los países de la ALADI/Cyclical Synchronization in ALADI´s Countries," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 35, pages 421-442, Mayo.
    2. Hem Basnet & Subhash Sharma, 2015. "Exchange rate movements and policy coordination in Latin America," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 39(4), pages 679-696, October.
    3. Çekin, Semih Emre & Pradhan, Ashis Kumar & Tiwari, Aviral Kumar & Gupta, Rangan, 2020. "Measuring co-dependencies of economic policy uncertainty in Latin American countries using vine copulas," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 207-217.
    4. León Padilla & Ángel Rodriguez García-Brazales, 2021. "Can South America form an optimal monetary area? A structural vector autoregression analysis," International Economics and Economic Policy, Springer, vol. 18(2), pages 309-329, May.

    More about this item

    Keywords

    Common Trends; Common Cycles; Economic Integration; Synchronization;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F15 - International Economics - - Trade - - - Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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