This publication, entitled the CEPAL Review, is covered in the Social Sciences Citation Index (SSCI), published by Thomson ISI, and in the Journal of Economic Literature (JEL), published by the American Economic Association
Exchange rate regimes and macroeconomic performance in Argentina, Brazil and Mexico
Martín Grandes, Research Fellow and Associate Professor of Economics, The American University of Paris and Helmut Reisen, Adviser, Development Centre of the Organization for Economic Cooperation and Development (OECD)
This paper deals with the ways in which the exchange rate regimes of Argentina, Brazil and Mexico shaped the macroeconomic performance of those countries over the period 1994-2003. The purpose of the analysis is to draw lessons for Latin American and other countries on whether and how the choice of the exchange rate regime can help sustained growth. As it is impossible to isolate the growth effect of the exchange rate regime in a comparative country study, the paper emphasises those macro variables that have been identified in the theoretical and empirical literature as important channels through which the choice of exchange rate regime affects economic performance, namely, investment, trade openness, capital flows and fiscal or institutional rigidities.