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Latin American foreign exchange intervention - Updated

Author

Listed:
  • Da Silva, Sergio
  • Nunes, Mauricio

Abstract

We examine Latin American foreign exchange intervention in a framework where the exchange rate regime is endogenous and there exists an inefficient, equilibrium foreign exchange intervention bias. The model suggests that greater central bank independence is associated with lesser intervention in the foreign exchange market, and also with leaning-against-the-wind intervention. Both results are confirmed by data from 13 Latin American countries.

Suggested Citation

  • Da Silva, Sergio & Nunes, Mauricio, 2007. "Latin American foreign exchange intervention - Updated," MPRA Paper 1982, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:1982
    as

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    File URL: https://mpra.ub.uni-muenchen.de/1982/1/MPRA_paper_1982.pdf
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    References listed on IDEAS

    as
    1. Kenneth Rogoff, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, Oxford University Press, vol. 100(4), pages 1169-1189.
    2. Luis Ignacio Jácome & Francisco F. Vazquez, 2005. "Any Link Between Legal Central Bank Independence and Inflation? Evidence from Latin America and the Caribbean," IMF Working Papers 05/75, International Monetary Fund.
    3. Eduardo Lora, 2001. "Structural Reforms in Latin America: What Has Been Reformed and How to Measure It," IDB Publications (Working Papers) 3338, Inter-American Development Bank.
    4. Eduardo Lora & Ugo Panizza, 2002. "Structural Reforms in Latin America under Scrutiny," Research Department Publications 4303, Inter-American Development Bank, Research Department.
    5. Richard C. Marston, 1983. "Stabilization Policies in Open Economies," NBER Working Papers 1117, National Bureau of Economic Research, Inc.
    6. S Da Silva, 2002. "A Classroom Guide to the Equilibrium Exchange Rate Model," Economic Issues Journal Articles, Economic Issues, vol. 7(2), pages 1-10, September.
    7. Alesina, Alberto & Summers, Lawrence H, 1993. "Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 151-162, May.
    8. Eijffinger, S. & De Hann, J., 1995. "The Political Economy of Central Bank Independence," Papers 9587, Tilburg - Center for Economic Research.
    9. Marston, Richard C., 1985. "Stabilization policies in open economies," Handbook of International Economics,in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 17, pages 859-916 Elsevier.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    foreign exchange intervention; exchange rates; Latin America;

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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