This paper analyzes the relationship between exchange rates, inflation and disinflation in Latin America. The analysis concentrates on two central issues. First, the historical experience with fixed exchange rates in four Latin American countries is investigated. It is shown that even though...

This study uses a sample of 34 disinflations undertaken by thirteen Latin American and Caribbean (LAC) nations to test if political institutions impact the cost of policy induced disinflations. We find, after controlling for several of the most important covariates in the literature, that...

In 1999, new monetary policy regimes were adopted in Brazil, Chile, Colombia and Mexico, combining inflation targeting with floating exchange rates. These regime changes have been accompanied by lower volatility in the monetary stance in Brazil, Colombia and Mexico, despite higher inflation...