Foreign Exchange Pressures in Latin America: Does Debt Matter?
AbstractLatin American countries have been in the eye of economic and ¯nancial storms several times in recent years. Advice from the International Monetary Fund has consistently highlighted the need for sound fiscal policies and lower debt levels. But is public debt relevant? Following a brief discussion of the theoretical issues involved, this paper examines empirically the relationship between public indebtedness and pressures in the foreign exchange market. Alternative measures are used to capture the latter and the analysis controls for a de facto classi¯cation of exchange rate regimes. Estimations of static and dynamic panels for 28 Latin American and Caribbean (LAC) countries report substantial fiscal effects.
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Bibliographic InfoPaper provided by School of Economics, University of Surrey in its series School of Economics Discussion Papers with number 1307.
Length: 23 pages
Date of creation: 2007
Date of revision:
Publication status: Forthcoming in Journal of International Development
currency crises; public debt; latin america;
Other versions of this item:
- Alex Mandilaras & Graham Bird, 2008. "Foreign exchange pressures in Latin America: does debt matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(5), pages 613-627.
- F30 - International Economics - - International Finance - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-27 (All new papers)
- NEP-CBA-2007-10-27 (Central Banking)
- NEP-IFN-2007-10-27 (International Finance)
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