Understanding Devaluations in Latin America: A "Bad Fundamentals" Approach

Maria Soledad Martinez Peria

International Finance from EconWPA

Abstract: This paper is an empirical study of the determinants of Latin American devaluations during the period between 1957 and 1988. The estimation of probabilities of devaluation is done using logit analysis. The empirical results show that reserves, the real exchange rate, the share of domestic credit to the public sector and the current account deficit have a significant effect on the likelihood of a devaluation. In summary, this paper confirms the view that devaluations in Latin America are a consequence of the state of fundamentals in these economies.

JEL-codes: F30 F31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fmk and nep-ifn
Date: 1998-05-28
Note: 41 pages text, plus appendix
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Related works:
Working Paper: Understanding Devaluations in Latin America: A 'Bad Fundamentals' Approach (1997)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpif:9805004

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