Alternative North American Currency Arrangements: A Research Agenda

Several possible areas of research regarding the North American currency arrangements are discussed, including: 1. Is exchange rate volatility and the associated bouts of upside and downside misalignment adversely affecting optimal resource allocation and the productivity performance? 2. What is the flexible exchange rate "buffering," and why and with what medium and long-term implications? 3. Given the emerging geo-economics of North American integration, new research is needed on the nature of so-called asymmetric shocks and how best to accommodate them, and what they imply about alternative exchange rate regimes for Canada. 4. Is it true that if the Canadian exchange rate remains as volatile over the next decade as it was over the previous one, market dollarization will increase dramatically?