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Symmetry of External Shock responses within the Andean Community of Nations : A SVAR Approach

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  • Andrea Bonilla

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - ENS de Lyon - École normale supérieure de Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet - Saint-Étienne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article studies the symmetry in reactions of the Andean Community of Nations (CAN) economies to external shocks in order to analyze the group's evolution towards economic integration. The undertaking of a Monetary Union project in South America enhances the usefulness of evaluating shocks within this region according to the Optimal Currency Area Theory. A Structural VAR model with non-recursive contemporaneous restrictions is built for each economy and a correlation analysis is performed. The results evidence that the CAN has evolved positively towards structural convergence.

Suggested Citation

  • Andrea Bonilla, 2012. "Symmetry of External Shock responses within the Andean Community of Nations : A SVAR Approach," Working Papers halshs-00657939, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00657939
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00657939
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    References listed on IDEAS

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    1. Kim, Soyoung & Roubini, Nouriel, 2000. "Exchange rate anomalies in the industrial countries: A solution with a structural VAR approach," Journal of Monetary Economics, Elsevier, vol. 45(3), pages 561-586, June.
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    3. Hochreiter, Eduard & Schmidt-Hebbel, Klaus & Winckler, Georg, 2002. "Monetary union: European lessons, Latin American prospects," The North American Journal of Economics and Finance, Elsevier, vol. 13(3), pages 297-321, December.
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    8. Sebastian Edwards, 2006. "Monetary unions, external shocks and economic performance: A Latin American perspective," International Economics and Economic Policy, Springer, vol. 3(3), pages 225-247, December.
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    More about this item

    Keywords

    Latin American countries; Monetary Union; OCA Theory; Structural VAR; Pays Latino-Américains; Union Monétaire; Théorie des ZMO; Modèle VAR Structurel;
    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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