A Critical Evaluation of the Proposal for Currency Convertibility of the Real

Fernando Ferrari Filho (), Frederico Jayme Jr, Gilberto Lima, José Luís Oreiro and Luiz Fernando de Paula ()

Brazilian Journal of Political Economy, 2005, vol. 25, issue 1, 154-173

Abstract: This paper aims at discussing critically Persio Arida’s proposal of adopting currency convertibility in Brazil. Arida (2003a, 2003b, 2004) points out that currency convertibility would make for lower domestic interest rates in Brazil, as well as for lower interest rates for the Brazilian external bonds. Besides, currency convertibility would stabilize capital flows, as well as exchange rate volatility in Brazil. We argue in this paper that this proposal does not lead necessarily either to less exchange rate volatility, or to lower interest rates. Besides, we close the paper by presenting some alternatives in terms of capital controls in Brazil. JEL Classification: E0; E6; F4.

Keywords: Financial liberalization; capital account convertibility; Brazilian economy (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations:

Downloads: (external link)
https://centrodeeconomiapolitica.org.br/repojs/ind ... rticle/view/627/2037 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ekm:repojs:v:25:y:2005:i:1:p:154-173:id:627

Access Statistics for this article

More articles in Brazilian Journal of Political Economy from Center of Political Economy
Bibliographic data for series maintained by Brazilian Journal of Political Economy (Brazil) ().