The bulk of recent literature on foreign exchange interventions has overlooked the potential interdependencies that may exist between these operations and the conduct of monetary policy. This is the case even under inflation targeting and especially in emerging-market economies, because central...

This papers estimates unrestricted monetary reaction functions for four Latin American countries (Brazil, Chile, Colombia and Mexico) and tests for the presence of non-linear effects in central bank behaviour. The analysis covers the post-1999 inflation-targeting period. We deal with the...

Indonesia’s business environment is discouraging entrepreneurship and holding back private-sector growth and development. Weaknesses in the regulatory framework, infrastructure bottlenecks and poor governance continue to weigh down on investment. Policies have been put in place to address...

Brazil has made considerable progress in recent years towards consolidating macroeconomic stability, which is a key framework condition for sustained growth. Monetary policy continues to respond swiftly to changes in the inflation outlook, anchoring expectations. Fiscal policy has been guided by...

The bulk of recent literature on foreign-exchange interventions has overlooked the potential interdependencies that may exist between these operations and the conduct of monetary policy. This is the case even under inflation targeting and especially in emerging-market economies, because central...

Brazil's fiscal adjustment since the floating of the real in 1999 has been impressive, even in periods of lacklustre growth. This suggests a remarkable fiscal effort to ensure public debt sustainability. To better gauge the magnitude of this adjustment effort, this paper applies the methodology...

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...

The Chilean authorities plan to raise budgetary allocations over the medium term for a variety of social programmes, including education, health care and housing. This incremental spending will need to be carried out in a cost-efficient manner to make sure that it yields commensurate...

This paper was prepared within the framework of "Deeper Integration of MERCOSUR: Dealing with Disparities", a joint initiative between the Integration and Regional Programs Department and the Operations Department 1 of the Inter-American Development Bank. Given the relatively lower political...

Inflation-targeting central banks often explicitly reserve the right to intervene in foreign exchange markets when the exchange rate 'deviates from fundamentals' and/or 'displays excessive volatility'. In the case of emerging markets, central banks can often ill afford to neglect exchange rate...