Inflation Targeting in Latin America: Toward a Monetary Union?

Abstract

In recent years, five of the main economies in Latin America - Brazil, Chile, Mexico, Colombia and Peru - have adopted Inflation Targeting regimes. In the context of these converging monetary strategies, would the IT nations in the region be better o adopting a common currency? Would they be better off if they dollarize? Would a common currency be a better alternative than dollarization? The answers to these questions are yes, yes and maybe.

Keywords: Monetary Union, Inflation Targeting, Latin America, Monetary Policy

JEL Classification: E31, E32, E42, E58