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Real macroeconomic stability and the capital account in Chile and Colombia

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  • Villar Gómez, Leonardo
  • Ffrench-Davis, Ricardo

Abstract

The management of real macroeconomic balances has shown to be a significant factor in explaining the growth performance and behavior of productive investment in emerging economies (EEs). The environment provided by macroeconomic policies to producers, including the “rightness” of macro-prices and the consistency between aggregate demand and potential GDP, have emerged as significant variables explaining the poor recent performance of LACs. Together with fiscal responsibility and prudential financial regulation, those variables conform a comprehensive set of real macroeconomic balances. In the present stage of globalization of financial volatility, capital flows have played, in emerging economies, a crucial role for the sustainability of those balances and their interplay with growth (Ffrench-Davis, 2005; Ocampo, 2005). Here we examine the macroeconomic policies implemented by Chile and Colombia since 1990, the successes and failures achieved, focusing in growth performance and macroeconomic sustainability.
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Suggested Citation

  • Villar Gómez, Leonardo & Ffrench-Davis, Ricardo, 2006. "Real macroeconomic stability and the capital account in Chile and Colombia," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1894.
    • Handle: RePEc:ecr:col014:1894
    Note: Includes bibliography
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    1. Leonardo Villar & Pilar Esguerra, 2005. "Comercio Exterior Colombiano En El Siglo Xx," Borradores de Economia 358, Banco de la Republica de Colombia.
    2. Rosa Evelia Sánchez, 2009. "Brief Review Of The Relationship Among Emigration, Poverty And Overseas Workers Remittances In Colombia," Revista de Economía y Administración, Universidad Autónoma de Occidente.
    3. Machinea, José Luis & Rozenwurcel, Guillermo, 2005. "Macroeconomic coordination in Latin America: does it have a future?," Series Históricas 7858, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. Anoruo, Emmanuel & Ramchander, Sanjay & Thiewes, Harold, 2007. "Crisis, contagion and cross-border effects: Evidence from the Latin American closed-end fund market," Global Finance Journal, Elsevier, vol. 17(3), pages 403-418, March.
    5. César TAMAYO y Andrés VARGAS, 2007. "Revisando la evidencia sobre frenazos súbitos y crisis financieras," Archivos de Economía 3948, Departamento Nacional de Planeación.
    6. Titelman Kardonsky, Daniel & Vera, Cecilia, 2009. "A summary of the experiences of Chile and Colombia with unremunerated reserve requirements on capital flows during the 1990's," Financiamiento para el Desarrollo 5200, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

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