Integration and disintegration in Mercosur: the impact of macroeconomic instability
(2005)Department of Economics
- Abstract
- This study examines the effect that macroeconomic instability has had on the integration process of the Common Market of the Southern Cone (Mercosur) after 1999. The thesis concludes that while the member benefited from the creation of Mercosur up until 1998 through growth in intra-regional trade and the creation of static welfare effects, macroeconomic instability has eradicated most of these benefits and the region has, as a direct result of the Brazilian and Argentinean recessions, returned to the same level of interdependence that it enjoyed prior to the creation of Mercosur. The effects on foreign direct investments were equally devastating, although no definite conclusions on the reasons behind the observed increase and decrease can... (More)
- This study examines the effect that macroeconomic instability has had on the integration process of the Common Market of the Southern Cone (Mercosur) after 1999. The thesis concludes that while the member benefited from the creation of Mercosur up until 1998 through growth in intra-regional trade and the creation of static welfare effects, macroeconomic instability has eradicated most of these benefits and the region has, as a direct result of the Brazilian and Argentinean recessions, returned to the same level of interdependence that it enjoyed prior to the creation of Mercosur. The effects on foreign direct investments were equally devastating, although no definite conclusions on the reasons behind the observed increase and decrease can be made due to the close relation between fluctuations in FDI and cyclic- and structural changes in both the domestic and international market. As a result of these findings we conclude that any benefits gained from an integration scheme will be lost in the case of macroeconomic instability and that the region should hence attempt to coordinate its macroeconomic policies in order to prevent such situations from ever occuring in the first place. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1644111
- author
- Bjurström, Louise and Norrman, Sara
- supervisor
- organization
- year
- 2005
- type
- M2 - Bachelor Degree
- subject
- keywords
- Macrieconomic Instability and Regional Integration, Economics, econometrics, economic theory, economic systems, economic policy, Nationalekonomi, ekonometri, ekonomisk teori, ekonomiska system, ekonomisk politik
- language
- English
- id
- 1644111
- date added to LUP
- 2005-03-30 00:00:00
- date last changed
- 2010-08-03 14:54:51
@misc{1644111,
abstract = {{This study examines the effect that macroeconomic instability has had on the integration process of the Common Market of the Southern Cone (Mercosur) after 1999. The thesis concludes that while the member benefited from the creation of Mercosur up until 1998 through growth in intra-regional trade and the creation of static welfare effects, macroeconomic instability has eradicated most of these benefits and the region has, as a direct result of the Brazilian and Argentinean recessions, returned to the same level of interdependence that it enjoyed prior to the creation of Mercosur. The effects on foreign direct investments were equally devastating, although no definite conclusions on the reasons behind the observed increase and decrease can be made due to the close relation between fluctuations in FDI and cyclic- and structural changes in both the domestic and international market. As a result of these findings we conclude that any benefits gained from an integration scheme will be lost in the case of macroeconomic instability and that the region should hence attempt to coordinate its macroeconomic policies in order to prevent such situations from ever occuring in the first place.}},
author = {{Bjurström, Louise and Norrman, Sara}},
language = {{eng}},
note = {{Student Paper}},
title = {{Integration and disintegration in Mercosur: the impact of macroeconomic instability}},
year = {{2005}},
}