The Peruvian economy has had an extraordinary performance in the last 10 years. The 2012 per capita GDP is 66 percent over 2002 and more than double its 1992 level. In a long term perspective, the cumulative growth of GDP per capita recorded in the last 10 years has been the strongest since...

This paper presents a Keynesian effective demand model that reproduces expansive or contractive effects of an expansionary fiscal policy as a function of the initial conditions of the public finances. In an economy with fiscal slack, when observed primary surplus is above the optimal fiscal...

Unlike what happenned in most Latin American economies after the Mexican crisis, the Peruvian trade deficit kept on growing during 1995, in spite of the application of restrictive fiscal and monetary policies. In this paper, a model with free capital mobility, flexible exchange rates and a...

The purpose of this paper is to study the transmission mechanism of monetary policy under an institutional framework characterized by a dollarized banking system, a flexible exchange rate and free capital movements. The main result of this study is that a restrictive monetary policy can...