A Concise History of Exchange Rate Regimes in Latin America

Roberto Frenkel and Martin Rapetti

UMASS Amherst Economics Working Papers from University of Massachusetts Amherst, Department of Economics

Abstract: The paper analyzes exchange rate regimes implemented by the major Latin American countries since the Second World War, with special attention on the period of the second globalization process beginning in the 1970s. The analysis follows a historical narrative aiming to provide an understanding of the domestic and external circumstances in which various regimes were adopted. A simple conceptual framework is developed in order to emphasize how the exchange rate regime may affect key nominal and real variables in a small open economy. After an overview of the main trends followed by the major countries in the region over the last 60 years, the paper focuses on regimes that were implemented 1) with stabilization purposes (nominal anchors) and 2) with the aim of targeting the level of the real exchange rate. These two sections analyze in greater detail some experiences illustrating the pros and cons of both strategies. The paper closes with an assessment about exchange rate experiences in Latin America. JEL Categories: F41, N16, F31

Keywords: Latin America; exchange rate regimes; real exchange rate; inflation targeting. (search for similar items in EconPapers)
Date: 2010-02
New Economics Papers: this item is included in nep-his, nep-ifn, nep-lam and nep-opm
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Citations: View citations in EconPapers (37)

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Working Paper: A Concise History of Exchange Rate Regimes in Latin America (2010)
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