Contractionary depreciations in Latin America during the 2000s

Brazilian Journal of Political Economy

关键词: Inflation targeting;    vector autoregressions;    contractionary effects of devaluations;    monetary policy rules;   

DOI  :  10.1590/0101-31572021-3196

来源: DOAJ

【 摘 要 】

ABSTRACT This paper explores the effects of currency depreciations on output for the main Latin American countries that have been using Inflation Targeting for almost two decades. We construct VAR models for Brazil, Chile, Colombia, Mexico and Peru for the last two decades and we find that depreciations have short-run contractionary effects in Brazil and Mexico. We illustrate some of the policy implications of that finding by building a simple model, and we show that contractionary effects of depreciations may have destabilizing effects when monetary policy is conducted using a standard Taylor Rule.

【 授权许可】

Unknown