{
  "title": "Monetary and Exchange Rate Arrangements for Nafta",
  "publication": "IMF Working Papers, March 1, 1993",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/monetary-and-exchange-rate-arrangements-for-nafta-1035",
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  "summary": "This paper considers the extent to which the North American Free Trade Area (NAFTA) meets the criteria for a common currency area. NAFTA is compared with the EC, a regional grouping for which initial plans for a monetary union are already in place.",
  "sections": [
    {
      "heading": "Objective and scope",
      "content": "- Examines the extent to which the North American Free Trade Area (NAFTA) meets the criteria for a common currency area.\n- Compares NAFTA with the European Community (EC), a regional grouping for which initial plans for a monetary union are already in place.\n- Focuses on anticipated benefits and costs of monetary union and of abandoning independent exchange rate instruments."
    },
    {
      "heading": "Key findings",
      "content": "- Most of the anticipated benefits from a monetary union in the EC apply with equal force to NAFTA.\n- Because the underlying disturbances are more diverse across members of NAFTA, the costs of abandoning the exchange rate instrument are likely to be higher.\n- The higher costs are particularly pronounced when NAFTA is compared to the EC’s continental core."
    },
    {
      "heading": "Thematic emphasis and technical subjects",
      "content": "- Subject terms listed in the source:\n  - Conventional peg\n  - Economic integration\n  - Economic theory\n  - Exchange rates\n  - Foreign exchange\n  - Monetary unions\n  - Supply shocks\n- Keywords listed in the source include:\n  - aggregate supply supply curve\n  - Conventional peg\n  - demand shock\n  - EC member country\n  - Europe\n  - exchange rate uncertainty\n  - Exchange rates\n  - Monetary unions\n  - North America\n  - single currency\n  - Southern Europe\n  - supply and demand disturbance\n  - supply curve\n  - supply disturbance\n  - Supply shocks\n  - WP"
    },
    {
      "heading": "Implications and analytical conclusion",
      "content": "- NAFTA could capture similar benefits from monetary union as the EC, but asymmetric and more diverse disturbances among NAFTA members increase the potential costs of currency unification.\n- Policy trade-off highlighted: potential integration benefits versus loss of exchange rate as an adjustment instrument given heterogeneous shocks.\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/monetary-and-exchange-rate-arrangements-for-nafta-1035"
    }
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    "Authors: Barry J. Eichengreen, Tamim Bayoumi",
    "Published: March 1, 1993",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451843804.001",
    "Examines the extent to which the North American Free Trade Area (NAFTA) meets the criteria for a common currency area.",
    "Compares NAFTA with the European Community (EC), a regional grouping for which initial plans for a monetary union are already in place.",
    "Focuses on anticipated benefits and costs of monetary union and of abandoning independent exchange rate instruments.",
    "Most of the anticipated benefits from a monetary union in the EC apply with equal force to NAFTA.",
    "Because the underlying disturbances are more diverse across members of NAFTA, the costs of abandoning the exchange rate instrument are likely to be higher.",
    "The higher costs are particularly pronounced when NAFTA is compared to the EC’s continental core.",
    "Subject terms listed in the source:",
    "Keywords listed in the source include:",
    "NAFTA could capture similar benefits from monetary union as the EC, but asymmetric and more diverse disturbances among NAFTA members increase the potential costs of currency unification.",
    "Policy trade-off highlighted: potential integration benefits versus loss of exchange rate as an adjustment instrument given heterogeneous shocks."
  ],
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