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This paper deals with the relationship between exchange rates and monetary policy in small open economies. I also discuss the connection between policy rates in small countries and in major advanced economies. A main point is that central bankers need to know whether the currency is...
Persistent link: https://www.econbiz.de/10012923002
I analyze whether countries with flexible exchange rates are able to pursue an independent monetary policy, as suggested by traditional theory. I use data for three Latin American countries with flexible exchange rates, inflation targeting, and capital mobility – Chile, Colombia and Mexico –...
Persistent link: https://www.econbiz.de/10011133498
The Mexican peso crisis of December 1994 sent shock waves through the world's financial and policy communities. What is to some extent surprising is not that the Mexican economy faced a major currency crisis, but that so many analysts and observers were shocked by this turn of events. Mexico had...
Persistent link: https://www.econbiz.de/10005777808
In this essay, I analyze Salvador Allende's economic policies in Chile during the early 1970s. I argue that the explosion of inflation during his administration (above 1,500% on a six-month annualized measure) was predictable, and that the government's response to it, through massive and strict...
Persistent link: https://www.econbiz.de/10014437020
In this essay, I argue that the explosion of inflation during the Salvador Allende administration in Chile (above 1,500% on a six-month annualized measure) was predictable. The government's use of massive and strict price controls generated acute macroeconomic imbalances. I postulate that the...
Persistent link: https://www.econbiz.de/10015338966
In this paper I analyze the work on exchange rates and external imbalances by University of Chicago faculty members during the university's first hundred years, 1892-1992. Many people associate Chicago's views with Milton Friedman's advocacy for flexible exchange rates. But, of course, there was...
Persistent link: https://www.econbiz.de/10014447249
In this essay, I argue that the explosion of inflation during the Salvador Allende administration in Chile (above 1,500% on a six-month annualized measure) was predictable. The government's use of massive and strict price controls generated acute macroeconomic imbalances. I postulate that the...
Persistent link: https://www.econbiz.de/10015333361
Persistent link: https://www.econbiz.de/10011809431
Persistent link: https://www.econbiz.de/10000685529
Persistent link: https://www.econbiz.de/10001344350