This paper develops a simple model of exchange rate determination under a floating system. The model is used to investigate the relationship between nominal interest rates movements and the exchange rate. It is shown that, depending on the nature of inter

On July 1999 Colombia entered into an extended facility agreement with the IMF. Clearly, problems currently affecting Colombia go well beyond economics, as political and social tensions have intensified. Many of the policies contemplated in the IMF progra

This paper investigates to what extent the international financial community has taken into account the risk characteristics of borrowing less developed countries when granting loans. Specifically, this study analyzes the determinants of the spread betwee

This paper explores the link between trade liberalization and unemployment, focusing in what has arguably been one of the most dramatic trade liberalization episodes in modern times: the Chilean trade reform of the 1970s. In little more than three years a

In this paper the relationship between the demand for international reserves and exchange rate adjustments is empirically investigated for a group of LDC's. It is shown that countries that have maintained a fixed exchange rate for a long period of time ha

In this paper the short run employment effect of a trade liberalization process in a less developed country is investigated. It is shown that when it is assumed both that capital is immobile between sectors in the short run and that there is an economy wi

This note presents in a simple framework the Balassa (1964) argument. It is shown that if technical progress is faster in the nontraded goods sector, their relative price will tend to rise through time. It is also shown that this increase in relative pric