Sources of Economic Fluctuations in Latin America and Implications for Choice of Exchange Rate Regimes PDF Download
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Author: Shaghil Ahmed
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 0
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Book Description
This paper studies the sources of economic fluctuations in three key Latin American countries (Argentina, Brazil, and Mexico) using a dynamic panel model, distinguishing between external and domestic shocks. The primary motivation is to examine the implications for the choice of monetary and exchange rate regimes, including dollarization. The results do not provide a strong, clear case in favor of a particular policy choice. On the one hand, foreign output shocks, including those of the U.S., appear to have a quite limited role in driving output fluctuations in these Latin countries; this absence of common shocks undermines the case for a rigidly fixed exchange rate regime. On the other hand, the historical experience of these countries indicates that real exchange rates are not very responsive to external shocks, in general, and that exchange rate depreciations tend to be contractionary in the short run. This suggests that rigidity of exchange rates may not be as costly for these countries as economic theory leads us to expect. Although the historical experience of these countries is certainly relevant, the caveat that it is characterized by several failed fixed exchange rate regimes, thereby making it a less-than-ideal testing ground for evaluating a pure floating exchange rate system, should be noted.
Author: Shaghil Ahmed
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 0
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Book Description
This paper studies the sources of economic fluctuations in three key Latin American countries (Argentina, Brazil, and Mexico) using a dynamic panel model, distinguishing between external and domestic shocks. The primary motivation is to examine the implications for the choice of monetary and exchange rate regimes, including dollarization. The results do not provide a strong, clear case in favor of a particular policy choice. On the one hand, foreign output shocks, including those of the U.S., appear to have a quite limited role in driving output fluctuations in these Latin countries; this absence of common shocks undermines the case for a rigidly fixed exchange rate regime. On the other hand, the historical experience of these countries indicates that real exchange rates are not very responsive to external shocks, in general, and that exchange rate depreciations tend to be contractionary in the short run. This suggests that rigidity of exchange rates may not be as costly for these countries as economic theory leads us to expect. Although the historical experience of these countries is certainly relevant, the caveat that it is characterized by several failed fixed exchange rate regimes, thereby making it a less-than-ideal testing ground for evaluating a pure floating exchange rate system, should be noted.
Author: Maria Luiza Falcão Silva
Publisher: Ashgate Publishing
ISBN:
Category : Economic stabilization
Languages : en
Pages : 360
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Book Description
This work analyzes the phenomenon of macroeconomic adjustment, with special emphasis on selected Latin American countries facing stabilization programmes. It provides a historical description of the origins, functioning and collapse of exchange-rate regimes from the international classical gold standard period to modern arrangements. The author supports the argument that systemic asymmetries in the worldwide adjustment mechanism are inherent in the international monetary system.
Author: Mr.Marcos d Chamon
Publisher: International Monetary Fund
ISBN: 1484393023
Category : Business & Economics
Languages : en
Pages : 320
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Book Description
Foreign exchange intervention is widely used as a policy tool, particularly in emerging markets, but many facets of this tool remain limited, especially in the context of flexible exchange rate regimes. The Latin American experience can be informative because some of its largest countries adopted floating exchange rate regimes and inflation targeting while continuing to intervene in foreign exchange markets. This edited volume reviews detailed accounts from several Latin American countries’ central banks, and it provides insight into how and with what aim many interventions were decided and implemented. This book documents the effectiveness of intervention and pays special attention to the role of foreign exchange intervention policy within inflation-targeting monetary frameworks. The main lesson from Latin America’s foreign exchange interventions, in the context of inflation targeting, is that the region has had a considerable degree of success. Transparency and a clear communication policy have been key. For economies that are not highly dollarized, rules-based intervention helped contain financial instability and build international reserves while preserving inflation targets. The Latin American experience can help other countries in the design and implementation of their policies.
Author: Vittorio Corbo
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 44
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Book Description
Author: Hubert Escaith
Publisher: United Nations Publications
ISBN:
Category : Business & Economics
Languages : en
Pages : 56
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Book Description
Author: Carol Wise
Publisher: Rowman & Littlefield
ISBN: 0815716842
Category : Business & Economics
Languages : en
Pages : 190
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Book Description
Most of the analysis of Latin American exchange rate problems and policies has concentrated on the economic side of things. This volume instead examines the politics of exchange rate management in four nations that had very different approaches and results. Although the Mexican peso crash, Brazil's currency crisis, Argentina's maintenance of a currency board, and Venezuelan policy responses to the shocks of 1997-98 have had major international financial ramifications, the origins and outcomes of these dramatic events have yet to be analyzed in a single volume. The contributors tie these policy episodes together using solid comparative analysis, in order to better inform the policy debate on these issues.
Author: Andrew Berg
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 114
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Book Description
We assess monetary regime options for Latin American countries. The costs of a common currency are likely to outweigh its benefits, as those countries face diverse economic shocks, do not trade much with each other, and are affected by common international financial shocks only to the same extent as the average pair of emerging markets. Unilateral dollarization would be desirable only for those countries where there are strong links to the U.S. economy, the credibility of the monetary authorities is irreversibly lost, and there is keen demand for dollar-denominated financial assets. Finally, some countries in the region seem to be good candidates for meaningful and useful floating.
Author: Werner Baer
Publisher: Homewood, Ill. : R.D. Irwin
ISBN:
Category : Inflation (Finance)
Languages : en
Pages : 572
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Book Description
Prepared papers and comments presented at the Conference on Inflation and Economic Growth held in Rio de Janeiro from Jan. 3-11, 1963. Summaries of discussions in panel sessions are also included.
Author: Fernando Blanco
Publisher: World Bank Publications
ISBN: 146481581X
Category : Business & Economics
Languages : en
Pages : 198
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Book Description
Following the collapse of commodity prices in Latin America and the Caribbean (LAC) in 2014-15, many countries in the region were unable to cushion the impact of the shock in order to experience a more gradual adjustment, to a large extent because they had not built adequate fiscal buffers during the commodities’ windfall from 2010-14. Many LAC countries entered 2020 and the COVID-19 crisis in an even more difficult position, with rising debt and limited fiscal space to smooth the negative impacts of the pandemic and adequately support their economies. Fiscal policy in most LAC countries has been procyclical. Public expenditure and debt levels have expanded in good times and contracted in severe downswings due to insufficient fiscal buffers, making crises deeper. Fiscal rules represent a promising policy option for these and other economies. If well-designed and implemented, they can help build buffers during periods of strong economic performance that will be available during rainy days to smooth economic shocks. This book—which was prepared before the COVID-19 crisis—reviews the performance and implementation of different fiscal rules in the region and world. It provides analytical and practical criteria for policy makers for the design, establishment, and feasible implementation of fiscal rules based on each country's business cycle features, external characteristics, type of shocks faced, initial fiscal conditions, technical and institutional capacities, and political context. While establishing new fiscal rules would not help to attenuate the immediate effects of this pandemic crisis, higher debt levels in the aftermath of COVID-19 will demand rebuilding better and stronger institutional frameworks of fiscal policy in LAC and emerging economies globally. Having stronger fiscal mechanisms that include fiscal rules can help countries prepare for the next crisis and should be on the front burner for policy makers in coming years. The findings and lessons discussed apply to economies of different sizes, with some differences under certain scenarios in terms of the technical design and criteria needed for implementation. In this book, policy makers will find that fiscal rules, if tailored to country characteristics, can work and be an essential fiscal tool for larger and particularly smaller economies.
Author: Victor A. Canto
Publisher: Springer
ISBN:
Category : Business & Economics
Languages : en
Pages : 216
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Book Description
This work grew out of a series of investigations begun by the authors in 1980 and 1981. Specifically the authors pursued two lines of inquiry. First, to advance the state of the theoretical lit erature to better explain the crises of liberalization which seemed to be afflicting the third world in general and Latin America in particular. To do this, several different kinds of models were in vestigated and adapted. These are presented in Chapters 2, 3 and 5. Secondly an analysis of the empirical evidence was conducted in order to gain insight into the processes that were thought to be occurring and the theoretical models that were being developed. Some of this work appears in Chapters 3, 4, 5 and 6. Other work by the authors on these issues has been published elsewhere and is referenced herein. There are a great many people whose work and whose com ments have influenced this work. We would like to especially thank Guillermo Calvo, Michael Connolly, Sebastian Edwards, Roque Fernandez, Michael Darby, Robert Clower, Neil Wallace, John Kareken, Paul McNelis, Jeffrey Nugent, Jaime Marquez, Lee Ohanian, Leroy Laney, Jorge Braga de Macedo, Dale Henderson, vii Matthew Canzoneiri, Arthur Laffer, Marc Miles, and George Von Furstenberg whose ideas and comments gave rise to much of our work. We would like to thank Suh Lee for his assistance with the computations in Chapter 5.
