Disinflating from moderate inflation in Latin America and the Caribbean

This paper studies the behavior of several macroeconomic variables during disinflationary episodes in Latin-America and the Caribbean (LAC). In particular, it focuses on disinflations from low and moderate peaks for the period 1973-2001. The methodology used for studying the average behavior of macr...

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Autores:
Hofstetter Gascón, Marc
Tipo de recurso:
Work document
Fecha de publicación:
2007
Institución:
Universidad de los Andes
Repositorio:
Séneca: repositorio Uniandes
Idioma:
eng
OAI Identifier:
oai:repositorio.uniandes.edu.co:1992/8037
Acceso en línea:
http://hdl.handle.net/1992/8037
Palabra clave:
Inflation
Growth
Disinflation
Trade balance
Exchange rate
Cambio exterior - América Latina - 1973-2001
Cambio exterior - Caribe (Región) - 1973-2001
Balanza comercial - América Latina - 1973-2001
Balanza comercial - Caribe (Región) - 1973-2001
E31, E32, E52, F43
Rights
openAccess
License
http://creativecommons.org/licenses/by-nc-nd/4.0/
Description
Summary:This paper studies the behavior of several macroeconomic variables during disinflationary episodes in Latin-America and the Caribbean (LAC). In particular, it focuses on disinflations from low and moderate peaks for the period 1973-2001. The methodology used for studying the average behavior of macroeconomic variables across disinflations overcomes the traditional problem of scarce long time series (of high frequency data) that has hindered the empirical research of monetary shocks in many LAC countries. Some of the important findings are as follows: (i) while GDP growth slowed down during the disinflations of the 70s and 80s, there is no evidence of this for the 90s; (ii) the trade balance significantly deteriorated during the disinflations; (iii) the nominal devaluation rate slowed down during the episodes; and (iv) the real exchange rate appreciated during the episodes.