Exchange rate pass-through inflation and wage differentials in late-industrializing economies: the Mexican case

This paper investigates exchange rate pass-through inflation, and the wage bargaining process, in a developing economy in which firms' market power is largely dependent on technical progress embodied in imported intermediates and capital goods. It develops a heterodox model of income distribution, based on theoretical contributions from Latin American structuralists, labor market segmentationists and post-Keynesian writers, and it presents supportive empirical evidence from the Mexican economy.

The industrial equilibrium exchange rate in Brazil: an estimation

This paper presents a methodology for calculating the industrial equilibrium exchange rate, which is defined as the one enabling exporters of state-of-the-art manufactured goods to be competitive abroad. The first section highlights the causes and problems of overvalued exchange rates, particularly the Dutch disease issue, which is neutralized when the exchange rate strikes the industrial equilibrium level. This level is defined by the ratio between the unit labor cost in the country under consideration and in competing countries. Finally, the evolution of this exchange rate in the Brazilian economy is estimated.

The value of the exchange rate and the Dutch disease

This paper revisits the original (2008) paper on the Dutch disease, which defined it by the existence of two exchange rate equilibriums (the current and the industrial exchange rate equilibriums). Its novelty is in claiming that, as we have a value and a market price for each good or service, we also have a value and a market price for foreign money. The value is the cost plus reasonable profit corresponding to the exchange rate that makes competitive the country's competent business enterprises; the nominal exchange rates floats around the value according to the demand and supply of foreign money. This basic distinction of the exchange rate in terms of value and in terms of price allows us to understand that the two equilibriums are defined in value terms, and opens room for a clear distinction of the policies that affect the value from the ones that affect the market price of the exchange rate.

Effects of overvaluation and exchange rate volatility over industrial investment: empirical evidence and economic policy proposals for Brazil

The present article aims to analyze the recent behavior of real exchange rate in Brazil and its effects over investment per worker in Brazilian manufacturing and extractive industry. Preliminary estimates presented in the article shows an over-valuation of 48% of real exchange rate in Brazil. The reaction between the level (and volatility) of real exchange rate and investment (per worker) in Brazil is analyzed by means of a panel data econometric model for 30 sectors of Brazilian manufacturing and extractive industry. The empirical results show that the level and volatility of real exchange rate has a strong effect over investment per worker in Brazilian industry. Finally, we conclude the article presenting a proposal for a new macroeconomic regime that aims to produce an acceleration of economic growth of Brazilian economy and, by that, a catching-up process with developed countries.

Trade rules and exchange rate misalignments: in search for a WTO solution

The debate on the link between trade rules and rules on exchange rates is raising the attention of experts on international trade law and economics. The main purpose of this paper is to analyze the impacts of exchange rate misalignments on tariffs as applied by the WTO - World Trade Organization. It is divided into five sections: the first one explains the methodology used to determine exchange rate misalignments and also presents its results for Brazil, U.S. and China; the second summarizes the methodology applied to calculate the impacts of exchange rate misalignments on the level of tariff protection through an exercise of "misalignment tariffication"; the third examines the effects of exchange rate variations on tariffs and their consequences for the multilateral trading system; the fourth one creates a methodology to estimate exchange rates against a currency of the World and a proposal to deal with persistent and significant misalignments related to trade rules. The conclusions are present in the last section.

Ventricular rate during acute atrial fibrillation and outcome of electrical cardioversion: The FinCV Study

The impact of ventricular rate (VR) on the outcome of electrical cardioversion (ECV) of acute atrial fibrillation (AF) is currently unknown. We aimed to determine the effect of VR during acute AF on the success of ECV, recurrence of AF and occurrence of post-cardioversion complications in 30 days follow-up. All ECVs performed in patients with acute atrial fibrillation lasting <48 hours in 2 Finnish university hospitals during 2003-2010 and 1 central hospital during 2010 were retrospectively identified. A total of 6,624 ECVs were performed in 2,821 consecutive patients. VR≤60 BPM was defined low and VR≥160 BPM high. The median VR before ECV was 109 BPM. The success rate of ECV was 94.2%. Bradycardia occurred in 62 (0.9%) and thromboembolic complications in 39 (0.6%) ECVs. Low VR was observed before 75 (1.1%) ECVs and male sex was its only independent predictor. High VR was observed in 165 (2.5%) ECVs. The independent predictors of high VR were younger age, <12 h episode duration, no previous history of AF and alcohol abuse. Low or high VR were not related to the success of ECV, incidence of thromboembolic or bradycardic complications, or recurrence of AF, although VR was significantly (p<0.001) lower in the patients in whom AF recurred. In conclusion, ECV of acute AF is an effective procedure and VR during AF does not affect its efficacy, the maintenance of sinus rhythm or the incidence of bradycardic, thromboembolic or other complications during 30 days follow-up after ECV. Low VR is predominately observed in male patients, while high VR was a feature related to a shorter history of AF and high alcohol-intake.

Institutions, credibility and crisis: the inconsistencies of Argentine exchange rate policy (1991-2006)

The purpose of this article is twofold. The first is to explain the time inconsistencies of the convertibility regime that led to the 2001 crisis. The argument suggests that the credibility requirements for convertibility induced a dynamic of legal, fiscal, financial and external commitments that increased exit costs and time inconsistencies. The second objective is to explain the tensions of the floating regime that replaced convertibility in 2002. We describe the effects of a floating exchange rate on macroeconomic imbalance and the growing tension between competitiveness and inflation.