This paper investigates the long run behavior of real exchange rates in nineteen countries of Latin America over the period 1970 - 2006. Our data does not support the Purchasing Power Parity (PPP) hypothesis, implying that real shocks tend to have permanent effects on Latin America’s real...

In an integration process, the quality of the agreement reached depends on the affinity observed in the domestic strategies and policies. Insofar as they are compatible, the agreement will be successful. Therefore, the harmonization of policies in regional integration agreements is justified....