ABSTRACT
Latin American countries are currently confronted with two main options concerning their prospects for regional integration. Since the early 1990s, a process of revitalisation and renewal of Latin American sub-regional integration has accompanied the structural economic reforms being implemented in the countries of the region. Convergence of inflation rates Deepening institutional integration is most beneficial if inflation rates are already reasonably similar among the member states participating in the regional arrangement. A striking feature of fixed but adjustable exchange rates under the Bretton Woods system is that it did not shield European countries from some “occasional” adjustments in exchange rate parities and from some significant real exchange rate variability. One of the key lessons from the European experience for Latin America seems therefore to be that intensifying institutional integration, such as for instance through the creation of a common market and monetary co-operation, indeed plays an important role in deepening and accelerating the process of regional economic integration.
