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Western Hemisphere > Argentina

You are looking at 1 - 10 of 12 items for :

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Cover IMF Working Papers
Inflation Determinants in Paraguay: Cost Push versus Demand Pull Factors
Brieuc Monfort
and
Santiago Peña
This article uses two analytical methodologies to understand the dynamics of inflation in Paraguay, the mark-up theory of inflation and the monetary theory of inflation. We also study the impact of different monetary aggregates. The results suggest that monetary factors, in particular currency in circulation, play a major role in determining long-run inflation, while foreign prices, in particular from Brazil, or some food products have a large impact on the short-term dynamics of inflation. Wage indexation may also contribute to locking up price increases.
Keywords:
WP; core inflation index; U.S. dollar; inflation dynamics; monetary aggregate
Cover IMF Working Papers
The Choice of Exchange Rate Regime and Monetary Target in Highly Dollarized Economies
Mr. Eduardo Borensztein
and
Mr. Andrew Berg
We examine the implications of high degrees of dollarization for the choice of exchange rate regime and the information content of various monetary aggregates in developing countries. We conclude that a high degree of currency substitution argues for a more fixed exchange rate regime, while asset substitution may imply that either more rigid or more flexible regimes may be appropriate. We also ask whether the most informative monetary aggregates include dollar assets. Based on an analysis of five countries, we conclude inter alia that broader aggregates that include dollar assets perform better than those that do not.
Keywords:
WP; currency; exchange rate; monetary aggregate; Dollarization; currency substitution; exchange rates; financial programming; money demand; rate of exchange rate depreciation; inflation equation; dollar currency; Granger cause inflation; foreign currency assets; money targeting; exchange rate volatility; form inflation equation; misaligned exchange rate; currency holding; aggregates granger cause inflation; money aggregate; Currencies; Monetary aggregates; Exchange rate arrangements; Demand for money
Cover IMF Working Papers
Has the Nature of Crises Changed? A Quarter Century of Currency Crises in Argentina
Ms. Nada Choueiri
and
Graciela Laura Kaminsky
The recent turmoil in currency markets in Asia, Europe, and Latin America has given a new impetus to the literature on currency crises. The literature originally linked currency crises to deteriorating economic fundamentals, but has more recently focused on self-fulfilling expectations and contagion. To assess the changing roles of domestic and external market fundamentals and contagion, this paper examines seven major currency crises in Argentina. It finds that while crises in the 1970s and 1980s were driven mainly by monetary and fiscal policies at home and abroad, contagion played an important role in the 1990s.
Keywords:
WP; exchange rate; money demand; interest rate; financial market; Argentina; currency crises; speculative attacks; vector autoregressions; dual-market premium; exchange rate regime; world interest rate; world interest rate shock; monetary policy shock; unit of account; Mexican peso; reserves holding; exchange rate market; currency turmoil; adverse money demand demand shock; interest rate increase; International reserves; Exchange rate arrangements; Multiple currency practices; Demand for money; Exchange rates; Global
Cover IMF Working Papers
Capital Controls and Trade Liberalization in a Monetary Economy
Mr. B. Jang
This paper reexamines Aizenman’s (1985) results on the effects of capital controls during unanticipated trade liberalization using an intertemporal optimizing monetary model. Unlike in Aizenman’s model, which is based on the currency substitution model, foreign money is an interest-bearing asset in this paper, and its major role is to smooth intertemporal consumption. With this modification, Aizenman’s results are reversed, thus showing that the effects of capital controls during trade liberalization would vary greatly depending on the role of foreign money in a country. The effects of an anticipated trade liberalization are also studied.
Keywords:
WP; current account; Capital Controls; Trade Liberalization; liberalization policy; capital mobility; money balance; current account adjustment; Exchange rates; Consumption; Demand for money
Cover IMF Working Papers
Monetary Impact of a Banking Crisis and the Conduct of Monetary Policy
Ms. Alicia García-Herrero
The experiences of seven countries that have undergone banking crises show that crises have significant implications for the short-run stability of the demand for money, the money multiplier, the transmission mechanism, and the signal variables of monetary policy. Monetary and credit instability, coupled with changes in the nature of the monetary and credit aggregates, complicate monetary management. These findings may require redesigning monetary instruments in favor of faster-reacting instruments, such as open market operations, and introducing additional indicators of the monetary stance, such as asset price and exchange rate movements. More frequent reviews of monetary programs may also be necessary.
Keywords:
WP; bank; central bank; Venezuela; Argentina; crisis; excess reserves; monetary management; la Nación; distressed bank; bank problem; money multiplier; Banking crises; Demand for money; Credit; Commercial banks; Monetary aggregates; Baltics
Cover IMF Working Papers
Dollarization in Lebanon
Mr. Johannes Mueller
The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Keywords:
WP; foreign currency deposit; currency substitution; interest rate differential; dollarization ratio; unit of account; dollarization process; management technique; CS-ratio ratchet; currency depreciation; Lebanese pound; Dollarization; Bank deposits; Currencies; Depreciation; Demand for money; Middle East
Cover IMF Working Papers
Money and Credit Under Currency Substitution
Mr. Carlos A. Rodriguez
This paper examines the effects on the supply of money and credit of a repatriation of foreign assets in an economy subject to currency substitution. In the absence of 100 percent reserve requirements, such a change in the location of deposits, which is not compensated by an increase in money demand, induces a credit boom that works itself out through a transitory current account deficit and real currency appreciation. These results are illustrated with data from the recent experience in Argentina and Peru where local banks have been authorized to capture dollar deposits from residents.
Keywords:
WP; dollar; dollar deposit; central bank; dollar account; dollar cost of living; foreign currency; dollar value; value of the CPI; Credit; Demand for money; Capital inflows; Reserve requirements; Currencies; Global
Cover IMF Working Papers
Foreign Currency Deposits: Implications for Macroeconomic Policies
Mr. Andréas Georgiou
This paper discusses the relationship between foreign currency deposits and money, and it shows that the indexation of part of the nominal money supply to the exchange rate, as a result of the presence of foreign currency deposits, will increase the inflationary effects of monetary disequilibria under a floating exchange rate system and will reduce the effect of a devaluation of a usually fixed exchange rate. When a real exchange rate rule is followed, the presence of foreign currency deposits implies that there is less of a tradeoff between the rate of nominal depreciation/inflation and the level of the real exchange rate. The paper shows how certain aspects of financial programming may be affected by the presence of these deposits.
Keywords:
WP; balance of payments; rate of depreciation; money stock; foreign currency; price level; rate of inflation; nominal exchange rate; excess demand; substitution take; presence of FCDs; interest income; money substitution; money balance; money holding; Currencies; Demand for money; Real exchange rates; Monetary base; Inflation; Eastern Europe
Cover IMF Working Papers
The Demand for Money During High Inflation Episodes: Some Latin American Evidenceon the Cagan Model
Mr. Mark P. Taylor
and
Ms. Kate Phylaktis
This paper examines the demand for money under conditions of very high inflation in Argentina, Bolivia, Brazil, Chile and Peru during the 1970s and 1980s. We test whether the monetary and inflationary experiences of these countries can be adequately characterized by the Cagan (1956) model, using an econometric procedure which is not reliant on any particular assumption concerning expectations formation except that forecasting errors are stationary. We also examine the importance of foreign asset substitution in domestic portfolios.
Keywords:
WP; forecasting inflation; exchange premium; rate of inflation; expected return; money holding; rate depreciation; money balance; Bolivia program; inflation rate series; money series; Inflation; Government debt management; Foreign assets; Demand for money; Price controls
Cover IMF Working Papers
The Demand for Money in Developing Countries: Assessing the Role of Financial innovation
Mr. Jose De Gregorio
,
Mr. Peter Wickham
,
Patricio Arrau
, and
Ms. Carmen Reinhart
Traditional specifications of money demand have been commonly plagued by persistent overprediction, implausible parameter estimates, and highly autocorrelated errors. This paper argues that some of those problems stem from the failure to account for the impact of financial innovation. We estimate money demand for ten developing countries employing various proxies for the innovation process and provide an assessment of the relative importance of this variable. We find that financial innovation plays an important role in determining money demand and its fluctuations, and that the importance of this role increases with the rate of inflation.
Keywords:
WP; opportunity cost; opportunity cost variable; money demand function; money decision; money holding; business money demand; money demand specification; money balance; opportunity cost of money; Demand for money; Inflation; Consumption; Currencies; Income