Argentina-Brazil Integration: Past Disagreements and Future Opportunities
Keywords:
MERCOSUR, macroeconomics, macroeconomic coordinationAbstract
The constitution of the MERCOSUR had a huge impact on the expectations of regional development. Almost 25 years later, however, those promises have blurred, and a high macroeconomic volatility turned good prospects into frustration. Our work warns against the fallacy of blaming integration for regional macroeconomic problems. Certainly, the risks remain latent, but this may mean that there has to be some potential expected benefits too. Since Brazil continues to be the leader and locomotive in the region, Argentina must engage in the design of policy mechanisms to ensure benefiting the most in good times, while minimizing the costs when facing recessions. Preserving our industrial production structure, sustaining trade cooperation, establishing a common strategy in the face of globalization, and working together on an agenda of coordinated policies are necessary steps to take advantage of an eventual recovery of Brazil.
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