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

Maria Martinez Peria

Center for International and Development Economics Research, Working Paper Series from Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley

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.

Keywords: devaluations; fixed exchange rates; economics (search for similar items in EconPapers)
Date: 1997-05-01
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Citations: View citations in EconPapers (1)

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Working Paper: Understanding Devaluations in Latin America: A "Bad Fundamentals" Approach (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:cdl:ciders:qt1h89j1pp

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