Real Macroeconomic Stability and the Capital Account in Chile and Colombia

Ricardo Ffrench-Davis and Leonardo Villar

Chapter 4 in Seeking Growth Under Financial Volatility, 2006, pp 96-138 from Palgrave Macmillan

Abstract: Abstract The management of real macroeconomic balances has shown to be a significant factor in explaining the growth performance and behavior of productive investment in emerging economies (EEs). The environment provided by macroeconomic policies to producers, including the “rightness” of macro-prices and the consistency between aggregate demand and potential GDP, have emerged as significant variables explaining the poor recent performance of LACs. Together with fiscal responsibility and prudential financial regulation, those variables conform a comprehensive set of real macroeconomic balances. In the present stage of globalization of financial volatility, capital flows have played, in emerging economies, a crucial role for the sustainability of those balances and their interplay with growth (Ffrench-Davis, 2005; Ocampo, 2005). Here we examine the macroeconomic policies implemented by Chile and Colombia since 1990, the successes and failures achieved, focusing in growth performance and macroeconomic sustainability.

Keywords: Exchange Rate; Foreign Direct Investment; Monetary Policy; Central Bank; Real Exchange Rate (search for similar items in EconPapers)
Date: 2006
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Book: Real macroeconomic stability and the capital account in Chile and Colombia (2006)
Working Paper: Real Macroeconomic Stability and the Capital Account in Chile and Colombia (2004)
Working Paper: REAL MACROECONOMIC STABILITY AND THE CAPITAL ACCOUNT IN CHILE AND COLOMBIA (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-52303-6_4

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DOI: 10.1057/9780230523036_4

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