Author : Fabiàn De Achàval Muñoz
Publisher :
ISBN 13 :
Total Pages : 249 pages
Book Rating : 4.:/5 (69 download)
Book Synopsis Essays on Exchange Rate Policy, Macroeconomic Volatility and Inequality in Latin America by : Fabiàn De Achàval Muñoz
Download or read book Essays on Exchange Rate Policy, Macroeconomic Volatility and Inequality in Latin America written by Fabiàn De Achàval Muñoz and published by . This book was released on 2009 with total page 249 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis is a collection of four essays on exchange rate policies, macroeconomic volatility and inequality in Latin America. Known to be a currency crises-prone region, Latin America is also highly volatile and the most unequal region of the world. On the other hand, and perhaps as a consequence of the above, these economies exhibit strong market failures. My research takes into account these factors in order to determine if there is a rationale for the intervention of the government in the economy be it for the sake of economic optimality or for social considerations. This research is divided in two parts. The first part focuses on optimal monetary policy in emerging markets in the light of two main economic characteristics of these economies: the currency mismatch and a high inflation pass-through. The first chapter addresses the theoretical foundations of the "fear of floating" which has been observed to characterize Latin American economies' exchange rate regimes. We show that the literature has identified circumstances under which optimal monetary policy limits exchange rate volatility. The second chapter assesses the trade-off faced by developing economies in the light of exchange rate pass-through and a non-Walrasian labor market from an optimal monetary policy perspective. The second part analyses the effects of macroeconomic volatility on inequality. The third charter reviews the literature both theoretically and empirically. Finally, the fourth chapter examines in a three-agents model the role on the informal sector to explain the link between volatility and inequality. We show that this new channel may challenge the conventional wisdom and that the poor are not necessarily worst-off.