Fostering economic policy coordination in Latin America: the REDIMA approach to escaping the prisoner's dilemma

Includes bibliography

Latin America and the Caribbean and the European Union: striving for a renewed partnership

Includes bibliography

The sustainability of monetary sterilization policies

Includes bibliography

The EU as an Effective Trade Power? Strategic Choice of Judicial Candidates in the Context of the World Trade Organization

Drawing on the European Union (EU) foreign policy literature on effectiveness, this article studies how the European Union chooses judges to serve on the World Trade Organization’s key judicial institution: the Appellate Body. Conceptually, the article differentiates between effectiveness in representation and effectiveness in impact. The article shows how delegation to the European Commission has increased the strategic agenda-setting power for championing its preferred candidates. The article further compares European and US practice in nominating candidates. Overall, the article finds that effectiveness in representation has increased over time. In terms of effectiveness in impact, the article shows how the international environment conditions the EU’s influence. The article also exposes the difficulties of studying the effectiveness of EU external relations due to the peculiar decision-making processes dominant in judicial bodies.

The Making of Optimal and Consistent Policy: An Analytical Framework for Monetary Models

This paper shows that optimal policy and consistent policy outcomes require the use of control-theory and game-theory solution techniques. While optimal policy and consistent policy often produce different outcomes even in a one-period model, we analyze consistent policy and its outcome in a simple model, finding that the cause of the inconsistency with optimal policy traces to inconsistent targets in the social loss function. As a result, the central bank should adopt a loss function that differs from the social loss function. Carefully designing the central bank s loss function with consistent targets can harmonize optimal and consistent policy. This desirable result emerges from two observations. First, the social loss function reflects a normative process that does not necessarily prove consistent with the structure of the microeconomy. Thus, the social loss function cannot serve as a direct loss function for the central bank. Second, an optimal loss function for the central bank must depend on the structure of that microeconomy. In addition, this paper shows that control theory provides a benchmark for institution design in a game-theoretical framework.

An Assessment of the Case for Monetary Union or Official Dollarization in Argentina, Brazil, Chile, Uruguay and Venezuela

We use a data set covering the whole period of Argentina's currency board and most of that spanned by the Mercosur trade agreement to examine the case for either a Latin American monetary union or monetary union with the USA (through official dollarization). Our econometric evidence using VAR techniques indicates that macroeconomic shocks are still so highly asymmetric in Latin America and between Latin American countries and the USA as to make monetary union or official dollarization somewhat doubtful policies.