Currency union in Mercosul

ABSTRACT Nowadays, influenced by the European experience, several Brazilian economists have given special attention to the possibility of a currency union among the countries of Mercosur. This paper makes a brief analysis of the main theoretical aspects that represent the basis for the proposition of a currency area. Besides this, the paper shows two distinct views in the national literature concerning the hypothesis of the creation of a currency area for the Mercosur. The main conclusion of this article is that the proposal mentioned above is not feasible, because the costs of macroeconomic coordination are too high.