Welfare gains of joining a union for Latin America

Ardiles Decker, Fabrizio Leonardo (2023) Welfare gains of joining a union for Latin America. MRes thesis, University of Nottingham.

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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).

Item Type: Thesis (University of Nottingham only) (MRes)
Supervisors: Licandro, Omar
Calvo Pardo, Hector
Keywords: Currency Union, Macroprudential Policies, Welfare, Latin America
Subjects: H Social sciences > HG Finance
Faculties/Schools: UK Campuses > Faculty of Social Sciences, Law and Education > School of Economics
Item ID: 72316
Depositing User: Ardiles Decker, Fabrizio
Date Deposited: 31 Dec 2023 04:40
Last Modified: 20 Mar 2024 13:25
URI: https://eprints.nottingham.ac.uk/id/eprint/72316

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