Financial integration and economic development within the framework of economic complementarity agreements
Códigos JEL: F36, N26, O10
DOI:
https://doi.org/10.53591/0pvv6672Keywords:
financial integration, Latin America, trade integration agreements, regional integration, free tradeAbstract
The economic complementarity agreements (ECAs) have been a tool used in Latin America to promote greater intraregional trade and financial integration. The context that motivates this analysis is to examine whether such integration promoted by ECAs has contributed to accelerating the economic development of the countries in the region. The central question investigated is whether there is a positive association between financial integration within the framework of ECAs and economic growth. The objective of the study is to empirically analyze this relationship in Latin America. Among the main findings, although ECAs have stimulated an increase in intraregional trade, investment and financial services flows, evidence of their impact on development is mixed. It is not clear that financial integration alone stimulates long-term growth. The general conclusion is that ECAs alone are not enough. Complementary reforms are required in other areas such as institutions, education, innovation and macro stability for financial integration to translate into greater development.
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