FI531 Presentation - Central America: Exchange Rate...

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Central America : Exchange Rate Regimes, CAFTA, and the Future NICARAGUA HONDURAS PANAMA GUATEMALA EL SALVADOR
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A Brief History September 15, 1821 Central America gained independence from Spain 1823 Formed United Provinces of Central America Guatemala El Salvador Honduras Nicaragua Costa Rica 1828 Honduras separated and disintegration began 1960s Returned focus to integration Integration efforts halted in the 1980s until mid-90s Early 2006 CAFTA-DR implemented WHAT DOES THE FUTURE HOLD?
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The Prospect of Regional Integration FEASIBILITIES Common language Common history Common characteristics Location and size Potential economic benefits Globalization Central American Monetary Council and other regional institutions INFEASIBILITIES Political conflicts Civil wars Nationalism Economic shocks poverty
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CAFTA Potential Foster integration among the countries and with the United States Access to the US market Greater predictability for investors Synchronize business cycles Reduce macroeconomic volatility Accelerate diversification of export base REQUIRES: Policy coordination in tax policy, financial sector, and Exchange Rate Policy
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This note was uploaded on 04/14/2010 for the course ECON 351-451 taught by Professor Prodan during the Spring '10 term at University of Alabama - Huntsville.

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FI531 Presentation - Central America: Exchange Rate...

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