The Path of European Institutional and Economic Integration: What Lessons for Latin America?

Dorrucci, Ettore; Firpo, Stefano; Fratzscher, Marcel; Mongelli, Francesco Paolo

doi:2005.20.2.217

Journal of Economic Integration 2005 June;20(2) :217-251.
DOI: https://doi.org/10.11130/jei.2005.20.2.217

The Path of European Institutional and Economic Integration: What Lessons for Latin America?

Ettore Dorrucci, Stefano Firpo, Marcel Fratzscher, Francesco Paolo Mongelli

ECB
San Paolo-IMI

ABSTRACT

-vis diverse measures of economic integration. We find that Latin America is currently less economically integrated not only than the European Union today, but in some cases even than the EU at the beginning of its regional integration process. A cluster analysis illustrates that the link between institutional and economic integration has worked both ways throughout the European experience. The more institutional integration went beyond the creation of a customs union and moved towards a common market and an economic and monetary union, the deeper economic integration turned out. Increasing economic integration in turn corroborated and sustained the process of institutional integration.

JEL Classifications: E42, F15, F33, F4

Keywords: Regional integration in Europe and Latin America | intra-regional exchange rate variability | optimum currency area

REFERENCE

1.	Alberola, E., A. Busián and F. de Lis. (2002), "The Quest for Nominal and Real Convergence Through Integration in Europe and Latin America," Banco de España, mimeo.

2.	Berg, A., Borensztein, E, and Mauro, P. (2000). "An Evaluation of Monetary Regime Options for Latin America". Paper presented at the seminar "Monetary Union: Theory, EMU Experience, and Prospects for Latin America", Vienna.