CENTRAL BANK INDEPENDENCE AND FOREIGN EXCHANGE POLICIES IN LATIN AMERICA

Roberto Junguito B. and Hernando Vargas-Herrera

No 2110, Borradores de Economia from Banco de la Republica

Abstract: The purpose of this paper is to analyze the links between central bank independence and foreing exchange policies, in the light of the recent experience of the major Latin American countries. To that end, the paper starts with a brief review of the literature on the subject. The second section of the paper deals with the different structures or models of central bank and foreing exchange management adopted in Latin-America. The third and central part sets up an analytical model which describes the objective function of the authority and derives the expected inflation path for each type of Latin- American central bank model. The paper ends with a section of monetary games illustrating the conflicts that arise between the Government and an independent central bank, when the monetary and foreign exchange policies are not controlled by the same authority.

Pages: 28
Date: 1996-02-28
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Citations: View citations in EconPapers (6)

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http://www.banrep.gov.co/docum/ftp/borra046.pdf

Related works:
Working Paper: Central Bank Independence and Foreign Exchange Policies in Latin America (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000094:002110

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