Understanding Devaluations in Latin America: A 'Bad Fundamentals' Approach
AbstractThis paper is an empirical study of the determinants of Latin American devaluations during the period between 1957 and 1988. The estimation of probabilities of devaluation is done using logit analysis. The empirical results show that reserves, the real exchange rate, the share of domestic credit to the public sector and the current account deficit have a significant effect on the likelihood of a devaluation. In summary, this paper confirms the view that devaluations in Latin America are a consequence of the state of fundamentals in these economies.
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Bibliographic InfoPaper provided by Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley in its series Center for International and Development Economics Research, Working Paper Series with number qt1h89j1pp.
Date of creation: 01 May 1997
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devaluations; fixed exchange rates; economics;
Other versions of this item:
- Maria Soledad Martinez Peria, 1998. "Understanding Devaluations in Latin America: A "Bad Fundamentals" Approach," International Finance 9805004, EconWPA.
- F30 - International Economics - - International Finance - - - General
- F31 - International Economics - - International Finance - - - Foreign Exchange
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