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Real exchange rates, dollarization and industrial employment in Latin America

Arturo Galindo (), Alejandro Izquierdo () and José Montero ()
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José Montero: Banco de España

No 601, Working Papers from Banco de España

Abstract: We use a panel dataset on industrial employment and trade for 9 Latin American countries for which liability dollarization data at the industrial level is available. We test whether real exchange rate fluctuations have a significant impact on employment, and analyze whether the impact varies with the degree of trade openness and liability dollarization. Econometric evidence supports the view that real exchange rate depreciations can impact employment growth positively, but this effect is reversed as liability dollarization increases. In industries with high liability dollarization, the overall impact of a real exchange rate depreciation can be negative.

Keywords: manufacturing employment; real exchange rates; debt composition; balance sheet effects (search for similar items in EconPapers)
JEL-codes: E24 F31 F34 G32 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2006-01
New Economics Papers: this item is included in nep-ifn, nep-lam and nep-mac
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http://www.bde.es/f/webbde/SES/Secciones/Publicaci ... o/06/Fic/dt0601e.pdf First version, January 2006 (application/pdf)

Related works:
Journal Article: Real exchange rates, dollarization and industrial employment in Latin America (2007) Downloads
Working Paper: Real Exchange Rates, Dollarization and Industrial Employment in Latin America (2006) Downloads
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