Description
Book SynopsisThis ground-breaking book analyses the severe monetary policy challenges facing Latin American countries. Contributors reflect on how these issues should be addressed by policy-makers, identifying the need for a synergic response from regional central banks.
Arguing that the challenges currently faced by regional central banks are intrinsically related, this book examines the risks generated by an international climate of uncertainty. It explores how to address inflationary pressures, output contraction, external vulnerabilities, tightness in advanced central banks’ monetary policies, nominal dollar appreciation, and falling commodity prices. Chapters focus on key elements of monetary policy, including transmission channels, exchange rates, international reserves, sustainable finance, and income inequality, to give an alternative view on the position of regional central banks in the global financial system.
Monetary Policy Challenges in Latin America will be an invaluable resource for students and scholars of monetary policy, development economics, banking, and political economy. It will also be essential reading for policy-makers seeking new perspectives on monetary policy.
Trade Review‘In this significant contribution, the editors and authors identify several key analytical dimensions for monetary policy makers in Latin America, while providing a comprehensive view on how to address the main monetary challenges of our time with concrete proposals, theoretical discussions, empirical evidence and analytical rigour. An outstanding contribution which should be widely read by scholars, students and policy makers.’ -- Stephany Griffith-Jones, Emeritus Professorial Fellow, Institute of Development Studies, Sussex University, UK
‘What a wonderful collection of essays on the challenges faced in Latin America. The editors have brought together an impressive list of scholars, both young and more established, to tackle difficult questions surrounding monetary policy. This book is an important step forward and must be read by all who wish to understand the complexity surrounding the economics of Latin America. Congratulations to the editors and to the authors.’ -- Jose Antonio Ocampo, Professor, Columbia University, US and former United Nations Under-Secretary-General for Economic and Social Affairs and Minister of Finance of Colombia
‘This book puts together 14 excellent policy-oriented - theoretical and empirical - contributions from important post-Keynesian and Structuralist economists. It focuses on policy and institutional arrangements to manage and overcome Balance-of-Payments constraints in Latin America. A must-read for those interested in heterodox short and medium-run open economy macroeconomics.’ -- Ricardo Summa, Professor of Economics, Federal University of Rio de Janeiro (UFRJ), Brazil
Table of ContentsContents: Introduction to Monetary Policy Challenges in Latin America xxi Fernando Toledo and Louis-Philippe Rochon PART I ALTERNATIVE VIEWS ABOUT CENTRAL BANKS AND MONETARY POLICY IN LACS 1 Assessing the new “integrated policy framework”: a counterfactual analysis of the case of Argentina 2 Sebastián Valdecantos 2 Macroeconomic policy under a managed floating exchange rate regime: a critical appraisal of the international currency hierarchy literature 16 Simone Deos and Enzo Gerioni PART II MONETARY POLICY TRANSMISSION CHANNELS IN LACS 3 Inflation targeting in open economies: the contradictions of determinacy and stability 34 Esteban Pérez Caldentey and Matías Vernengo 4 Limitations of monetary policies in open developing economies: external capital inflows and sterilisation policies 59 Noemí Levy Orlik 5 Global financial cycle and monetary policy rules: a neo-Kaleckian model for emerging markets and developing economies 78 Gabriel Michelena and Fernando Toledo PART III MONETARY POLICIES AND EXCHANGE RATES IN LACS 6 Exchange rate management in Latin America: towards the making of a policy target exchange rate 97 Daniel Pérez-Ruiz, Gary Dymski, and Annina Kaltenbrunner 7 Real exchange rates, growth, and inflation targeting 117 Nelson Barbosa Filho 8 When are devaluations more contractionary? A quantile VAR estimation for Argentina 132 Gabriel Montes-Rojas and Nicolás Bertholet PART IV MONETARY POLICIES, INTERNATIONAL RESERVES, AND SUSTAINABLE FINANCE IN LACS 9 Latin American Reserve Fund: Latin America’s alternative to the IMF? 150 William N. Kring 10 Climate change, monetary policy, and green finance in Latin America: the open economy dimension 168 Pablo G. Bortz and Nicole Toftum PART V MONETARY POLICIES, CENTRAL BANKS, INCOME INEQUALITY, AND FISCAL POLICIES IN LACS 11 Fiscal responses to income inequality surges. A panel estimation for Emerging Market and Developing Economies (EMDEs) 185 Jorge Carrera, Pablo de la Vega, and Fernando Toledo 12 Fiscal and monetary policy challenges after COVID-19: The Argentinean case 206 Damián Pierri 13 International reserves, repurchase agreements, and the Brazilian monetary policy 220 Sylvio Antonio Kappes 14 External debt and economic growth in Latin America and the Caribbean 230 Alfredo Schclarek Curutchet Index 256
