Download or read book Foreign Exchange Intervention in Inflation Targeters in Latin America written by Mr.Marcos d Chamon and published by International Monetary Fund. This book was released on 2019-02-28 with total page 320 pages. Available in PDF, EPUB and Kindle. Book excerpt: Foreign exchange intervention is widely used as a policy tool, particularly in emerging markets, but many facets of this tool remain limited, especially in the context of flexible exchange rate regimes. The Latin American experience can be informative because some of its largest countries adopted floating exchange rate regimes and inflation targeting while continuing to intervene in foreign exchange markets. This edited volume reviews detailed accounts from several Latin American countries’ central banks, and it provides insight into how and with what aim many interventions were decided and implemented. This book documents the effectiveness of intervention and pays special attention to the role of foreign exchange intervention policy within inflation-targeting monetary frameworks. The main lesson from Latin America’s foreign exchange interventions, in the context of inflation targeting, is that the region has had a considerable degree of success. Transparency and a clear communication policy have been key. For economies that are not highly dollarized, rules-based intervention helped contain financial instability and build international reserves while preserving inflation targets. The Latin American experience can help other countries in the design and implementation of their policies.
Download or read book The Use of Inflation Targeting in Latin American Countries written by Jonathan P. Edwards and published by . This book was released on 2004 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Monetary Policy Strategies for Latin America written by Frederic S. Mishkin and published by World Bank Publications. This book was released on 2000 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: Instead of focusing the debate about the conduct of monetary policy on whether the nominal exchange rate should be fixed or flexible, the focus should be on whether the monetary policy regime appropriately constrains discretion in monetary policymaking. Three frameworks deserve serious discussion as possible long-run strategies for monetary policy in Latin America. A hard exchange-rate peg, monetary targeting, and inflation targeting.
Download or read book Inflation Targeting in Latin America written by and published by . This book was released on 2014 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: Estimation of conventional Taylor rules for Brazil, Chile, Colombia and Peru shows that central banks increase their repo rate in response to increases in the output gap and, except in Peru, to deviations of inflation expectations from target. Using a Markov-Switching methodology, it is found that, in the presence of external shocks, Chile, Colombia and Peru temporarily abandoned their conventional reaction function. The Taylor Rule is expanded and variables are included related to exchange rate misalignments and to domestic credit developments; limited evidence is found that countries have used some form of integrated inflation targeting. There is strong evidence that intervention in F/X markets is determined by exchange rate misalignments rather than by exchange rate volatility and that most countries seem particularly concerned with a strong currency. Central banks appear to have pursued an inflation objective using a standard Taylor rule and an exchange rate objective through interventions in the F/X market.
Download or read book On the Credibility of Inflation Targeting Regimes in Latin America written by Rodrigo Mariscal and published by . This book was released on 2015 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inflation targeting has been adopted in a set of emerging economies, including eight countries in Latin America. The success of this regime may depend critically on the credibility of the target and the expectation that the authorities will take appropriate actions if the target is breached. This paper exploits a database of inflation expectations and attempts to measure whether, for a set of inflation targeters in Latin America, expectations are well anchored. A tighter anchoring of expectations is interpreted as a gain in credibility. Also considered are the effects on the credibility of the regime if the inflation target is breached. The results indicate that while inflation expectations have not been fully anchored over the whole sample period, credibility has risen, but at the same time the cost of breaching the target has grown.
Download or read book Central Banking in Latin America written by Mr.Luis Ignacio Jácome and published by International Monetary Fund. This book was released on 2015-03-17 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides a brief historical journey of central banking in Latin America to shed light on the debate about monetary policy in the post-global financial crisis period. The paper distinguishes three periods in Latin America’s central bank history: the early years, when central banks endorsed the gold standard and coped with the collapse of this monetary system; a second period, in which central banks turned into development banks under the aegis of governments at the expense of increasing inflation; and the “golden years,” when central banks succeeded in preserving price stability in an environment of political independence. The paper concludes by cautioning against overburdening central banks in Latin America with multiple mandates as this could end up undermining their hard-won monetary policy credibility.
Download or read book Inflation Targeting in Latin America written by Vittorio Corbo and published by . This book was released on 2001 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book To Cut or Not to Cut That is the Central Bank s Question In Search of the Neutral Interest Rate in Latin America written by Mr.Nicolas E. Magud and published by International Monetary Fund. This book was released on 2012-10-09 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates neutral real interest rate (NRIR) ranges for 10 Latin American countries that either have full-fledged inflation targeting regimes in place or have recently adopted them, using an array of methodologies commonly used in the literature. We find that NRIRs have declined in the last decade, with more economically and financially developed economies exhibiting lower NRIR levels. Based on the estimated NRIRs, we assess that the current monetary stance (measured by the interest rate gap) is appropriately neutral in most of the considered economies, in line with closing output gaps. We also observe that the interest rate gap can be a good predictor of future inflation dynamics and economic growth. In addition, looking at the recent experiences in Brazil and Peru, we suggest that macro-prudential policies could affect the monetary stance even in the absence of direct interest rate changes, through affecting the NRIR.
Download or read book Inflation Targeting in Latin Am rica Empirical Analysis Using Garch Models written by Carmen Broto and published by . This book was released on 2008 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Inflation Targeting in Latin America written by Carmen Broto Pelegrín and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: During the last years, a number of countries have adopted formal inflation targeting (IT) monetary policy frameworks in a context of global inflation moderation. This paper studies inflation dynamics in eight Latin American countries, some of which have adopted formal targets. We analyze possible benefits associated with IT in terms of lower inflation, inflation volatility and volatility persistence. To describe inflation dynamics and evaluate its impact, we use an unobserved components model, where each component can follow a GARCH type process. In general, the main findings of the empirical exercise show that the adoption of IT has been useful to reduce the inflation level and volatility in these countries. [Resumen de autor]
Download or read book Monetary Policy and Macroeconomic Stabilization in Latin America written by Rolf J. Langhammer and published by Springer Science & Business Media. This book was released on 2007-08-07 with total page 261 pages. Available in PDF, EPUB and Kindle. Book excerpt: Latin America is a very important region of the globe, which has been buffeted by successive waves of economic instability within the last decades. These waves have caused several episodes of hyperinflation or near hyperinflation, and several currency and financial crises, which, in certain moments, have even spilled over and affected other emerging markets. This has resulted in huge costs in terms of lost potential growth, and, as is inevitable, the markets most affected by this have been the least capable of defending themselves. In a region plagued by still considerable rates of social exclusion, with some of the highest rates of income concentration in the whole globe, the human costs of these crises have been very substantial. Starting in the early 1990s, the slow implementation of reforms, plus the resumption of more sustained growth—to a substantial degree linked to the increase in commodity prices, especially since the early 2000s—seems to have resulted in a more stable situation. Initially, in early reformers like Chile, later in the larger economies of the region, like Brazil and Mexico, a consensus— embraced by both sides of the political spectrum—towards integration in global markets, both in their trade and financial components, floating exchange rates, independent monetary authorities, and sustainable fiscal policies has emerged.
Download or read book Monetary Policy and Inflation Expectations in Latin America written by and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The current monetary policy framework in several Latin American countries, combining inflation targeting and a floating exchange-rate regime, has contributed to disinflation by anchoring expectations around low, stable levels. This paper uses co-integration analysis to estimate simultaneously a monetary reaction function and the determinants of expected inflation for Brazil, Chile, Colombia and Mexico in the post-1999 period. It also tests for the presence of volatility spillovers between the monetary stance and inflation expectations based on M-GARCH modelling. The results of the empirical analysis show that: i) there are long-term relationships between the interest rate, expected inflation and the inflation target, suggesting that monetary policy has been conducted in a forward-looking manner and helped anchor inflation expectations in the countries under examination, and ii) greater volatility in the monetary stance leads to higher volatility in expected inflation in Brazil, Colombia and Mexico, suggesting that interest-rate smoothing contributes to reducing inflation expectations volatility. No volatility spillover effect was detected in the case of Chile.
Download or read book Weathering the Global Storm written by International Monetary Fund and published by International Monetary Fund. This book was released on 2010-12-01 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper highlights that central banks from Brazil, Chile, Colombia, Mexico, and Peru (the LA5 countries) reaped the benefits of what they sowed in successfully weathering the global crisis. The adoption of far-reaching institutional, policy, and operational reforms during the last two decades enabled central banks to build credibility about their commitment with the objective of price stability. Thus, when the 2007 - 08 supply shock and the financial crisis hit the world, the LA5 central banks reacted swiftly and effectively based on a flexible policy framework and with the support of strong macroeconomic and financial foundations. Building on the experience of the LA5 central banks and complementing with recommendations from the IMF’s technical advice, the paper provides several suggestions for countries seeking to strengthen the effectiveness of monetary policy.
Download or read book Inflation and Growth in Latin America written by Werner Baer and published by Homewood, Ill. : R.D. Irwin. This book was released on 1964 with total page 572 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prepared papers and comments presented at the Conference on Inflation and Economic Growth held in Rio de Janeiro from Jan. 3-11, 1963. Summaries of discussions in panel sessions are also included.
Download or read book Inflation Targeting and Term Premia Estimates for Latin America written by Ole Rummel and published by . This book was released on 2015 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inflation targeting has been widely adopted in Latin America. In this paper, we show evidence consistent with major beneficial effects from so doing, with falling term premia and anchored policy rate expectations. To do this we construct term premia estimates using the method suggested by Adrian et al. (2013) for selected inflation targeting Latin American economies. They use synthetic prices constructed from estimated yield curves to derive holding-period excess returns and condition on the principal components of the yields. This approach is extremely easy to implement and fast to calculate. We detect a small drop in interest rate expectations since the global financial crisis but longer term rates seem remarkably well anchored. There is also relatively low correlation between our estimated Latin American and US term premia.
Download or read book An Evaluation of Monetary Regime Options for Latin America written by Andrew Berg and published by International Monetary Fund. This book was released on 2002-12 with total page 114 pages. Available in PDF, EPUB and Kindle. Book excerpt: We assess monetary regime options for Latin American countries. The costs of a common currency are likely to outweigh its benefits, as those countries face diverse economic shocks, do not trade much with each other, and are affected by common international financial shocks only to the same extent as the average pair of emerging markets. Unilateral dollarization would be desirable only for those countries where there are strong links to the U.S. economy, the credibility of the monetary authorities is irreversibly lost, and there is keen demand for dollar-denominated financial assets. Finally, some countries in the region seem to be good candidates for meaningful and useful floating.
Download or read book Inflation Targeting in Latin America written by Marcel Hofstetter Gascón and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
