The paper presents results of empirical tests with hybrid nominal exchange rate models for the Brazilian foreign exchange market, using macroeconomic and market microstructure variables. The basic model was originally proposed and tested in the German (DM/US$) and the Japanese (¥/US$) foreign...

In the literature, little role is attributed to the country risk conditional volatility in the determination of the macroeconomic equilibrium in a developing small open economy (DSOE). This paper posits the prime hypothesis that, in the presence of multiple equilibria and self-fulfilling...

Upon winning the 2002 presidential elections, event that considerably increased the Brazilian country risk levels and volatility, Lula celebrated by declaring: “hope has beaten fear”. Extending Une and Portugal (2004), the aim of this paper is twofold: to empirically test the interrelations...

Evidence on international capital flows suggests that foreign direct investment (FDI) is less volatile than other financial flows. To explain this finding, I model international capital flows under the assumptions of imperfect enforcement of financial contracts and inalienability of FDI....

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...