We use a previously unexploited data set to calculate the real exchange rate with respect to the U.S. dollar for Mexico for 1930.01-1960.12, and to test for purchasing power parity (PPP). The initial results from the Augmented Dickey-Fuller (ADF) test show weak support for the PPP hypothesis....

The paper draws macroeconomic policy lessons by contrasting the developing countries experience in the 2000s —including their performance in the recent global crisis— with the previous three decades of financial globalization. The main lesson is the crucial role of macroeconomic policies in...

This paper considers two important sources of relative price changes in an open economy: the terms of trade and the real exchange rate movements. The paper examines the effects on real output of the terms of trade and the real exchange rate movements in Argentina, between 1977 and 1998, and...

This document is centered in analyzing the mechanisms of transmission of the monetary and real exchange rate imbalances on the inflation rate. It initially focuses on determining the balances on these markets, and therefore, it studies the money demand and the long run trajectory of the real...

This paper examines some aspects of the performance of the floating exchange rate regime adopted in Mexico in December of 1994. In particular, it focuses on the interest rate- exchange rate link and on the relationship between disinflation and the real exchange rate. It shows that both the real...

Many analysts argue that the substantial growth in agri-food trade between Mexico and the United States can be attributed to changes in exchange rate, exchange rate volatility and NAFTA. This paper quantifies the effects of the changes in Mexico-United States real exchange rate, its volatility...