Till Geography Do Us Part? Prolegomena to an Economic and Monetary Union between the Dominican Republic and Haiti
This paper offers a preliminary assessment of the potential benefits and costs of an economic and monetary union (EMU) between the Dominican Republic and Haiti -- two countries sharing the same island but whose history is one of conflict and diverg...
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| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100317141318 http://hdl.handle.net/10986/3728 |
| Summary: | This paper offers a preliminary
assessment of the potential benefits and costs of an
economic and monetary union (EMU) between the Dominican
Republic and Haiti -- two countries sharing the same island
but whose history is one of conflict and divergent economic
prospects in recent decades. After a brief review of the
historical context, it examines the nature of these
potential benefits and costs. It then conducts a preliminary
analysis (using basic statistical techniques) of some key
criteria for the formation of an economic and monetary union
between the two countries. A more formal analysis of
business cycle synchronization, based on basic and extended
integrated vector auto-regression models with exogenous
variables (VARX), is developed next. Overall, the analysis
suggests that at this stage several economic criteria are
not satisfied for the two countries to fully benefit from an
economic and monetary union. At the same time, however, the
endogeneity of most of these criteria (including the degree
of business cycle synchronization) militates in favor of an
aggressive medium-term agenda for integration between them. |
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