Modern Exchange-rate Regimes, Stabilisation Programmes and Co-ordination of Macroeconomic Policies: Recent Experiences of Selected Developing Latin American Economies
Published in 1999, 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. The recent theoretical literature dealing with the rules vs discretion debate and its interaction with the credibility issue is reviewed. This topic is intrinsically related to the dispute over the appropriate role of exchange-rate anchors in disinflation programmes. Against a background of academic dispute between advocates of exchange-rate prescriptions and monetary conceptions, the contrasting views of different theorists regarding the choice of exchange rate regimes are presented and assessed. Finally, a comparative analysis of recent experiments in Argentina, Brazil, Chile and Mexico with exchange-rate based disinflation stabilization programmes is undertaken. The problems that have arisen while establishing new institutional arrangements, such as new currency or a policy rule for monetary base creation, are examined.
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The advantage of exchange-rate stability is that international trade and
investment can be conducted with minimal risk of capital losses due to currency
value fluctuations. The price-level stability was associated with the
encouragement of ...
[Barro, 1979] But Alfred Marshall (1923) was dubious that long-run price stability
would be achieved by a system dependent on the 'hazard of mining'.12 The
empirical evidence points, nevertheless, to very low rate of inflation among the
It could therefore provide a nominal anchor to the international monetary system.
18 The outstanding feature of the classical gold standard seems to have been its
association with exchange-rate stability. Examining the behaviour of the ...
Exchange-rate stability did not extend to China, El Salvador or Honduras, which
remained on silver and whose currencies therefore fluctuated in terms of gold,
nor did it encompass Spain and Latin American countries whose currencies ...
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Systemic Asymmetries Inherent in the International
Monetary vs ExchangeRate Targeting
The Dilemma of Selected Latin American Countries Facing
The International Financial System