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Financial Markets and Politics: The Confidence Game in Latin American Emerging Economies

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  • Martínez, Juan
  • Santiso, Javier

Abstract

This article focuses on the interactions between politics and financial markets in emerging economies. More precisely, it examines how Wall Street reacts to major Latin American political events. The case study focuses on the 2002 Brazilian presidential elections. The first section of the article provides a critical review of the available literature. The second section presents an empirical study of Wall Street analysts’ perceptions of the 2002 presidential elections in Brazil, based on reports produced by leading Wall Street investment firms. The final section uses polling and financial data from previous Brazilian elections to place the events of 2002 in comparative historical perspective.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 12909.

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Date of creation: 2003
Date of revision:
Handle: RePEc:pra:mprapa:12909

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Keywords: Emerging economies; Financial markets; International political economy; Latin America;

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References

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  1. Michael P. Dooley & Jeffrey A. Frankel, 2003. "Managing Currency Crises in Emerging Markets," NBER Books, National Bureau of Economic Research, Inc, number dool03-1, October.
  2. Acemoglu, Daron & Johnson, Simon & Robinson, James A & Thaicharoen, Yunyong, 2002. "Institutional Causes, Macroeconomic Symptoms: Volatility, Crises and Growth," CEPR Discussion Papers 3575, C.E.P.R. Discussion Papers.
  3. Barry Eichengreen & Michael D. Bordo, 2002. "Crises Now and Then: What Lessons from the Last Era of Financial Globalization," NBER Working Papers 8716, National Bureau of Economic Research, Inc.
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  6. Michael D. Bordo & Antu Panini Murshid, 2002. "Globalization and Changing Patterns in the International Transmission of Shocks in Financial Markets," NBER Working Papers 9019, National Bureau of Economic Research, Inc.
  7. Leblang, David & Bernhard, William, 2000. "The Politics of Speculative Attacks in Industrial Democracies," International Organization, Cambridge University Press, vol. 54(02), pages 291-324, March.
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  17. S. Brock Blomberg & Jeffry Frieden & Ernesto Stein, 2005. "Sustaining fixed rates: The political economy of currency pegs in Latin America," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 203-225, November.
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Citations

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Cited by:
  1. Jeetendra Dangol, 2008. "Unanticipated Political Events and Stock Returns: An Event Study," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 20, pages 86-110, April.
  2. Anja Linder & Carlos Santiso, 2003. "Not Everything that Counts Can be Counted: A Critical Look at Risk Ratings and Governance Indicators," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 29, pages 105-132.
  3. Roberto Chang, 2010. "Elections, Capital Flows, and Politico-economic Equilibria," American Economic Review, American Economic Association, vol. 100(4), pages 1759-77, September.
  4. Cristiano Prado Martins Barbosa, 2004. "Fatores Políticos E Institucionais: Impactos Sobre Paradas Bruscas De Financiamento Externo," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32th Brazilian Economics Meeting] 070, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  5. Sebastián Nieto Parra & Javier Santiso, 2008. "Wall Street and Elections in Latin American Emerging Economies," OECD Development Centre Working Papers 272, OECD Publishing.
  6. Jorge Blazquez & Javier Santiso, 2003. "Mexico, un ex-emergente?," Working Papers 0301, BBVA Bank, Economic Research Department.
  7. Steven A. Block & Burkhard N. Schrage & Paul M. Vaaler, 2003. "DEMOCRACY’S SPREAD: Elections and Sovereign Debt in Developing Countries," William Davidson Institute Working Papers Series 2003-575, William Davidson Institute at the University of Michigan.
  8. Andrade, Sandro C. & Kohlscheen, Emanuel, 2010. "Pessimistic Foreign Investors and Turmoil in Emerging Markets : The Case of Brazil in 2002," The Warwick Economics Research Paper Series (TWERPS) 926, University of Warwick, Department of Economics.
  9. Jorge Hargrave Gonçalves Da Silva, 2014. "Partisan Politics And Country Risk: Evidence From The 2002 Brazilian Presidential Election," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 041, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].

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