| Summary: | I present a set of scenarios that analyze the intention of a union for the case of Latin America countries by developing a calibrated DSGE model with heterogeneous union. The model accounts for both a monetary and a fiscal union that controls for real and financial frictions with the implementation of different monetary and macroprudential policy regimes.
Preliminary results suggests that in general countries are better off (until some extent) with a monetary and a fiscal union that controls for macroprudential policies, but it seems that these gains comes exclusively from the weighted gains of peripheral countries rather than for core countries as well, i.e. in almost all scenarios core countries are better off without any type of union. The scenario with no monetary but just fiscal union is the only one that reports welfare losses (-0.0028), while the scenario with a monetary union and heterogeneous macroprudential policies, just for peripheral countries, accounts for the greatest welfare gains in the analysis (+0.0258).
|
|---|