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 thro…
This study investigates the relationship between individual and household characteristics and income inequality in Central America, the Dominican Republic and Mexico from 1990 to 2002. A Theil decomposition exercise of individual and household income inequality is used to determine factors important for the level of inequality. In addition, the use of a novel semi-parametric simulation methodology from DiNardo, Fortin and Lemieux (1996) provides counterfactual income distributions of individuals and households to assess the importance of changes in their demographic, education and labo…
This paper examines the theoretical foundations for macroeconomic policy coordination and the related empirical findings in Latin America, contributing an original analysis that advocates new dialogue mechanisms to facilitate coordination in this region. The theoretical survey is concerned with non-cooperative coordination games, including dynamic games and those with imperfect information. The practical value of these game-theoretic tools is illustrated using economic examples. One important result is that implementing different forms of dialogue in specific situations can help to reach a coo…
The 1980s and 1990s have been decades of instability and slow growth for most of the Latin American region. There are exceptions, however. Chile and the Dominican Republic grew rapidly in the last decade or so although in recent years both economies, for different reasons, have entered in cycles of more sluggish growth. The purpose of this paper is to advance our understanding of the growth patterns of the Latin American economy in the final decades of the 20th century. We focus on the analysis of medium-to-long run growth, as opposed to the standard discussion of the determinants of high freq…
The recovery of the economies of MERCOSUR, and the disturbances that the recent crises generated in the region have motivated reconsideration of the medium term prospects of the integration project. This paper tries to contribute to this activity with a brief analysis of regional macroeconomic interactions, and a discussion in broad terms of incentives and restrictions for macroeconomic cooperation in the specific conditions of the region. The themes that play through the discussion are that (i) the lack of a shared concrete perspective about the role of MERCOSUR for the growth of the nationa…
For most developing countries, open regionalism has emerged as quite a sensible response to the undergoing turbulent and asymmetric process of economic globalization. Moreover, the successful experience of the countries which are now part of the European Union, has made regional integration an increasingly attractive option for the developing world. Whenever regional integration is intended to go beyond merely a free trade agreement, macroeconomic coordination becomes a key issue. Theoretically, the underlying idea of the macroeconomic coordination is the interdependency between econo…