Differences in growth, productivity and inflation levels are going to be a prominent feature of the future of EMU, as the convergence process is still ongoing in the new Member States. This convergence process can be described by the Balassa-Samuelson proposition, which states that faster growth...

This paper develops and estimates an unobserved components model for purposes of monetary policy analysis and inflation targeting in a small open economy. Cyclical components are modeled as a multivariate linear rational expectations model of the monetary transmission mechanism, while trend...

This paper re-examines the behavioral responses of key macroeconomic variables in Canada to exogenous shocks to the relative price of investment goods. It does so by developing a stylized two-sector real business cycle model which is simulated to explore its ability to shed new light on the...

The object of this paper is to develop an Early Warning System of Macro Vulnerability for several Latin American countries based on previous work of Kaminsky, Lizondo and Reinhart (1997) and Kaminsky (1998). We build a composite leading indicator that signals macroeconomic vulnerability, showing...

This paper assesses empirically whether global risk aversion (GRA) and some if its determinants (US economic growth and the US long term interest rates) explain developments in Latin American sovereign spreads. We find that GRA is significant and positively related to Latin American sovereign...

Sumario La ciencia económica es un tipo específico de conocimiento dentro de las ciencias sociales. Para lograr realizar un estudio del conocimiento económico de tal naturaleza, o sea, para hacer ciencia económica, es preciso seguir determinados procedimientos que nos permitan realizar un...

This paper reviews central bank legislation in 24 countries in Latin America and the Caribbean during the 1990s. Using panel regressions, the paper finds a negative relationship between legal central bank independence (CBI) and inflation. This result holds for three alternative measures of CBI,...

This paper analyses the 1980s Latin American debt crisis in Argentina, Brazil and Mexico and, in particular, the influence of cumulative processes at work in its early and final stages. The paper is organised in three sections. The first examines the crisis<92> features in the three countries, and...</92>

This paper examines the growth pattern followed by the Chilean economy with reference to the macroeconomic reforms undertaken during the Pinochet regime, which were largely maintained by successive democratic administrations and partially reproduced by neighbouring countries. The focus is on the...

This study takes stock of the institutional reform of monetary policy in Latin America since the early 1990s. It argues that strengthening the legal independence of central banks, together with macroeconomic policies, was instrumental in reducing inflation from three-digit annual rates in the...