Symmetry of External Shock Responses within the Andean Community of Nations: A SVAR Approach
Andrea Gabriela Bonilla Bolaño
University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)
December 1, 2011
GATE Working Paper No. 1140
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.
Number of Pages in PDF File: 30
Keywords: Latin American countries, Monetary Union, OCA Theory, Structural VAR
JEL Classification: C32, E42, F41working papers series
Date posted: January 9, 2012
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