Regional Currencies Versus Dollarization: Options for Asia and the Americas

30 Pages Posted: 11 Jun 2003

See all articles by Felipe Larrain

Felipe Larrain

Pontificia Universidad Catolica de Chile

José Tavares

Centre for Economic Policy Research (CEPR); Nova School of Business and Economics

Cristina Garcia

Independent

Abstract

This paper undertakes an empirical assessment of Dollarization versus regional currency union as options for the economies of East Asia, South America and Central America. We use summary indicators of bilateral integration to examine the determinants of real exchange rate volatility within each region and between each region and the United States. While Europe is characterized by a high degree of regional integration, there is evidence of increasing integration in East Asia and persistently low integration in the Americas, especially as compared to the levels of bilateral integration vis-a-vis the United States. Our estimates confirm the patterns of regional integration above and reveal substantial regional differences as to the determinants of real exchange rate volatility.

Keywords: Exchange Rates, Currency Areas, Dollarization, East Asia, Europe, South America, Central America

JEL Classification: E42, F15, F31, F33, F36

Suggested Citation

Larrain, Felipe and Tavares, José and Garcia, Cristina, Regional Currencies Versus Dollarization: Options for Asia and the Americas. Available at SSRN: https://ssrn.com/abstract=398061 or http://dx.doi.org/10.2139/ssrn.398061

Felipe Larrain

Pontificia Universidad Catolica de Chile ( email )

Av. Vicuna Mackenna 4860
Macul. Correo 17
Santiago
Chile
56 2 354-4027 (Phone)
56 2 553-2377 (Fax)

José Tavares (Contact Author)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda, 1
Carcavelos, 2775-405
Portugal

Cristina Garcia

Independent

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
310
Abstract Views
1,719
rank
140,174
PlumX Metrics