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Exchange Market Pressure, Monetary Policy, and Economic Growth: Argentina in 1993 - 2004

  • Nuria Malet
  • Clara Garcia
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    The pressure in the exchange market against a particular currency has been frequently measured as the sum of the loss of international reserves plus the loss of nominal value of that currency. This paper follows the tradition of investigating the interactions between such measure of exchange market pressure (EMP) and monetary policy; but it also questions the usual omission of output growth in the empirical investigations of the interrelations between EMP, domestic credit, and interest rates. The focus of this work is Argentina between 1993 and 2004. As in previous studies, we found some evidence of a positive and double-direction relationship between EMP and domestic credit. But output growth also played a role in the determination of EMP, even more than domestic credit or interest rates. Also, there is some evidence that EMP affected growth negatively.

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    File URL: http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_51-100/WP99.pdf
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    Paper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp99.

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    Date of creation: 2005
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    Handle: RePEc:uma:periwp:wp99
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    15. Guillermo A. Calvo, 2000. "Balance-of-Payments Crises in Emerging Markets: Large Capital Inflows and Sovereign Governments," NBER Chapters, in: Currency Crises, pages 71-97 National Bureau of Economic Research, Inc.
    16. Pablo Bustelo & Clara Garcia & Iliana Olivie, 1999. "Global and Domestic Factors of Financial Crises in Emerging Economies: Lessons from the East Asian Episodes (1997-1999)," Working Papers 002, Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales.
    17. Connolly, Michael B & Taylor, Dean, 1984. "The Exact Timing of the Collapse of an Exchange Rate Regime and Its Impact on the Relative Price of Traded Goods," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(2), pages 194-207, May.
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