Exchange Market Pressure on the Pound-Dollar Exchange Rate: 1925-1931

An investigation of exchange market pressure against the pound sterling during the inter-war period. The main findings are that a) the behavior of UK fundamentals relative to those of the USA help to explain exchange market pressure against the pound; b) during the run up to devaluation in September 1931 the monetary authorities in the UK were acting to reduce domestic credit; but that c) additional pressure was brought against the pound from speculative sources. These findings relate to current thinking on the choice of exchange rate regime as even well behaved fundamentals may not be sufficient to sustain a currency on its peg.

France, Italy, and Spain: Culturally Similar Nations, Yet Drastically Different In Their Roles as European Union Nations

Since France, Italy and Spain are neighboring Western European countries, whose languages and cultures have descended from Latin, it is inevitable that these countries share similarities on many levels. France, Italy and Spain share similar lifestyles, religious values and cultural heritages. Throughout history France, Italy and Spain have experienced many of the same historical events because of their geographical proximity. Now that all three countries are members of the European Union they have become further united by occupying a common area without border controls, and sharing a common market, laws, and currency. While France, Italy and Spain share many commonalities, their opinions and relationships within the European Union are diverse. Although each nation struggles to balance its national identity with its European identity and to maintain its sovereignty while at the same time giving some of it up to the EU, each nation has its own ideas about how much its identity should change and how much sovereignty it should give up to the EU government. Each nation also has unique opinions about what it means to part of the European Union and what the requirements for becoming a member nation should be. Each nation has different goals it hopes to accomplish for its own country and for the European Union. The differing ideas amongst France, Italy and Spain are a result of the variance that exists amongst their political and economic relationships and institutions, which have been molded by the historical experiences of each nation. The focus of this paper will be examining why France, Spain and Italy share many cultural similarities, yet differ so greatly in their roles as members of the European Union. After a brief background on the European Union, I will discuss the cultural similarities France, Italy and Spain share. I will then mention several economic and political differences between the three countries and use supporting evidence to explain why and in what context these differences have arisen

Export Promotion through Exchange Rate Policy: Exchange Rate Depreciation or Stabilization?

Exchange rate movements affect exports in two ways -- its depreciation and its variability (risk). A depreciation raises exports, but the associated exchange rate risk could offset that positive effect. The present paper investigates the net effect for eight Asian countries using a dynamic conditional correlation bivariate GARCH-M model that simultaneously estimates time varying correlation and exchange rate risk. Depreciation encourages exports, as expected, for most countries, but its contribution to export growth is weak. Exchange rate risk contributes to export growth in Malaysia and the Philippines, leading to positive net effects. Exchange rate risk generates a negative effect for six of the countries, resulting in a negative net effect in Indonesia, Japan, Singapore, Taiwan and a zero net effect in Korea and Thailand. Since the negative effect of exchange rate risk may offset, or even dominate, positive contributions from depreciation, policy makers need to reduce exchange rate fluctuation along with and possibly before efforts to depreciate the currency.

The Performance of Domestic and Foreign Banks: The Case of Korea and the Asian Financial Crisis

This paper considers the performance of banks, domestic and foreign, in Korea prior to, during, and immediately after the Asian financial crisis, examining how the profitability of those banks differed and identifying factors that explain why those differences existed. The performance of Korean banks deteriorated dramatically in 1998 with most banks recovering somewhat in 1999. Foreign banks did not experience the same negative effect on their returns on assets and equity as a rule. Several standard findings emerge. For example, equity to assets correlates positively with domestic, but not foreign, bank performance, as measured by the returns on assets and equity, even when the government recapitalized institutions that were performing quite badly. Also, foreign-currency deposits significantly and negatively correlate with domestic Korean bank performance, although only in the post-crisis period for regional banks. In sum, the domestic Korean banks suffered more severely from the Asian financial crisis than foreign banks.

Determinants and Effects of Maturity Mismatches in Emerging Markets: Evidence from Bank Level Data

Despite the extensive work on currency mismatches, research on the determinants and effects of maturity mismatches is scarce. In this paper I show that emerging market maturity mismatches are negatively affected by capital inflows and price volatilities. Furthermore, I find that banks with low maturity mismatches are more profitable during crisis periods but less profitable otherwise. The later result implies that banks face a tradeoff between higher returns and risk, hence channeling short term capital into long term loans is caused by cronyism and implicit guarantees rather than the depth of the financial market. The positive relationship between maturity mismatches and price volatility, on the other hand, shows that the banks of countries with high exchange rate and interest rate volatilities can not, or choose not to hedge themselves. These results follow from a panel regression on a data set I constructed by merging bank level data with aggregate data. This is advantageous over traditional studies which focus only on aggregate data.

Testing for Balance Sheet Effects in Emerging Market Countries

This paper tests the presence of balance sheets effects and analyzes the implications for exchange rate policies in emerging markets. The results reveal that the emerging market bond index (EMBI) is negatively related to the banks' foreign currency leverage, and that these banks' foreign currency exposures are relatively unhedged. Panel SVAR methods using EMBI instead of advanced country lending rates find, contrary to the literature, that the amplitude of output responses to foreign interest rate shocks are smaller under relatively fixed regimes. The findings are robust to the local projections method of obtaining impulse responses, using country specific and GARCH-SVAR models.

Automatic Stabilizer Feature of Fixed Exchange Rate Regimes in Emerging Markets

This paper shows that countries characterized by a financial accelerator mechanism may reverse the usual finding of the literature -- flexible exchange rate regimes do a worse job of insulating open economies from external shocks. I obtain this result with a calibrated small open economy model that endogenizes foreign interest rates by linking them to the banking sector's foreign currency leverage. This relationship renders exchange rate policy more important compared to the usual exogeneity assumption. I find empirical support for this prediction using the Local Projections method. Finally, 2nd order approximation to the model finds larger welfare losses under flexible regimes.

Equity Markets, the Money Market, and Long-Run Monetary Neutrality

This paper outlines a process for teaching long-run neutrality of money, drawing an analogy between equity markets and the money market. The key points in the discussion include the following: (1) What is the price of money? (2) Why does the long-run demand for money trace out a rectangular hyperbola? (3) Why does the slow adjustment of goods and service prices to changes in the stock of money lead to a different short-run demand for money? and (4) Why does a successful currency reform generate similar short-run movements in the price of money as movements in equity share prices after a change in the supply of shares? I have used this approach successfully for over 30 years at all levels, wherever I need to discuss the money market in a macroeconomic model.

An Assessment of the Case for Monetary Union or Official Dollarization in Argentina, Brazil, Chile, Uruguay and Venezuela

We use a data set covering the whole period of Argentina's currency board and most of that spanned by the Mercosur trade agreement to examine the case for either a Latin American monetary union or monetary union with the USA (through official dollarization). Our econometric evidence using VAR techniques indicates that macroeconomic shocks are still so highly asymmetric in Latin America and between Latin American countries and the USA as to make monetary union or official dollarization somewhat doubtful policies.

Increasing Derivatives Market Activity in Emerging Markets and Exchange Rate Exposure

Understanding the effects of off-balance sheet transactions on interest and exchange rate exposures has become more important for emerging market countries that are experiencing remarkable growth in derivatives markets. Using firm level data, we report a significant fall in exposure over the past 10 years and relate this to higher derivatives market participation. Our methodology is composed of a three stage approach: First, we measure foreign exchange exposures using the Adler-Dumas (1984) model. Next, we follow an indirect approach to infer derivatives market participation at the firm level. Finally, we study the relationship between exchange rate exposure and derivatives market participation. Our results show that foreign exchange exposure is negatively related to derivatives market participation, and support the hedging explanation of the exchange rate exposure puzzle. This decline is especially salient in the financial sector, for bigger firms, and over longer time periods. Results are robust to using different exchange rates, a GARCH-SVAR approach to measure exchange rate exposure, and different return horizons.

El ataque libertarista contra el igualitarismo y el marxismo : actualidad de un debate inconcluso

El presente artículo examina las principales líneas de ataque lanzadas por el libertarismo de derecha -expresado fundamentalmente en la obra de Robert Nozick-, contra el igualitarismo liberal de John Rawls y el materialismo histórico. En particular, analiza el rechazo nozickeano a la justicia distributiva, a la deseabilidad (y posibilidad) de la cooperación social, y a los esquemas distributivos contrarios al principio de autopropiedad. Asimismo, explora el impacto de este principio libertarista sobre algunos postulados fundamentales del marxismo. Desde una perspectiva que se nutre de los principales debates de la filosofía política contemporánea, y con una opción teórica por el igualitarismo, este texto presenta y procura debilitar las más audaces tesis nozickeanas, las cuales siguen ejerciendo gran influencia en círculos académicos, en algunas instancias de formulación de políticas públicas y, sobre todo, en el sentido común forjado en tiempos de hegemonía neoliberal.

Los grandes grupos económicos : Ganadores y perdedores en la post-convertibilidad : Un estudio basado en la trayectoria del sector servicios y en el nuevo rol del Estado [2002-2010]

A lo largo de la post-convertibilidad el esquema de los ganadores y perdedores entre los grandes grupos económicos 'pertenecientes al sector servicios, financiero, agro-industrial, industrial, petrolero-minero' se fue redefiniendo. Este trabajo de cuenta de tales cambios a partir de considerar los estudios sociales más importantes sobre el tema, que incluyen tanto el problema de la crisis de la convertibilidad como la nueva situación de los grandes grupos económicos y el Estado durante la post-convertibilidad. De esta manera es de suponer como necesario comenzar con una conceptualización de la crisis de la convertibilidad y sus consecuencias, para entender la situación y los problemas que debieron solucionar los grandes grupos económicos y el Estado a comienzos de la post-convertibilidad para impulsar un proceso de crecimiento económico sostenido. Así las dicotomías presentes entre los trabajos que priorizan, por un lado, la lucha entre fracciones, y, por otro, el peso de la crisis, nos servirá para dicho fin. En segundo lugar se analizaran los diferentes trabajos que explican, de diversas maneras, la nueva situación en que se encontraron -y se encuentran- las fracciones de la burguesía, y su relación con las funciones del Estado a lo largo de la post-convertibilidad. De aquí saldrán los principales insumos para pensar el rol del Estado -bajo un nuevo tipo de arbitraje- y las acciones de los grandes grupos económicos, ambos condicionados por la crisis de la convertibilidad y el mercado mundial. Con las conceptualizaciones aceptadas, se analizará la acción de los grandes grupos económicos y las funciones del Estado para un caso específico: los grandes grupos económicos de las empresas privatizadas y su relación con el nuevo tipo de arbitraje estatal en la post-convertibilidad, según dos periodos diferentes. Y, se redefinirá el esquema de ganadores y perdedores para tal caso, teniendo como elemento distintivo la relación de las empresas privatizadas y los subsidios

Asociaciones empresarias del agro y crisis de acumulación, 1998-1999 : Un antecedente de la "Mesa de Enlace"

El objetivo del artículo es reconstruir la acción de las asociaciones empresarias agropecuarias en 1998-99, analizándola vis a vis con la situación del sector en la crisis económica iniciada en 1998. Para aproximarnos, analizamos la situación del agro bajo la Convertibilidad mediante estadísticas oficiales y bibliografía especializada. Asimismo, abordamos la organización y demandas de las asociaciones empresarias del agro mediante documentos, comunicados y declaraciones. Se destacan como resultados el cambio a una posición crítica de la SRA y CRA en la crisis, la similitud de demandas con la FAA y Coninagro y los variables grados de unidad expresados en el proceso

Perspectivas sobre el turismo en la Comunidad Andina de Naciones : Análisis comparativo con el Mercosur

El proyecto de integración al que aspiran los países miembros de la Comunidad Andina de Naciones (can) tiene un carácter exhaustivo, que excede el ámbito de los acuerdos comerciales. En este contexto, la integración en materia de turismo ha despertado un interés creciente entre los gobiernos de América Latina y el Caribe, por su capacidad de generar divisas y favorecer la inversión privada, la creación de empleo, la inclusión y el encadenamiento de empresas pequeñas y comunidades locales. Asimismo, la actividad turística puede contribuir a reforzar la identidad regional y subregional de los esquemas de integración. El turismo es uno de los rubros económicos más importantes para los países en desarrollo y, a su vez, se lo reconoce como un factor que contribuye a la reducción de la pobreza y al crecimiento económico. Por ello, se lo debe considerar como una oportunidad para el desarrollo de los países de la can, sobre todo porque los miembros del bloque andino cuentan con una oferta turística diversificada compuesta por recursos naturales y culturales de gran atractivo. En el presente trabajo se analiza la evolución del flujo de turistas en los países de la Comunidad Andina de Naciones y se esboza un estudio comparativo con el bloque del mercosur. Luego, se elabora una matriz que permite observar, a primera vista, la magnitud del turismo emisivo intrarregional en ambos casos, así como determinar ciertas conclusiones a partir de los datos observados y comparados. Finalmente, se presentan algunas propuestas que los cuatro países de la CAN podrían desarrollar en el ámbito de la cooperación horizontal, en relación con la promoción conjunta y con la participación de las ciudades de la región en la red de Mercociudades

Mercado laboral y desarrollo territorial : San Luis y Cuyo

El Desarrollo Local Territorial es un proceso endógeno de construcción social que apunta a la generación de capacidades locales aprovechando los recursos territoriales para fortalecer el entramado socio-institucional y el sistema económico-productivo y movilizarlos para mejorar la calidad de vida de una comunidad. Un aspecto relevante, de cara al Desarrollo Local, es conocer la estructura y evolución de la población, el perfil del mercado de trabajo, así como los principales problemas de empleo en la zona en consideración. La Región de Cuyo, integrada históricamente por las provincias de Mendoza, San Juan y San Luis, presenta singularidades tanto en sus perfiles productivos como en su desarrollo económico. En particular, la Provincia de San Luis se caracteriza fuertemente por la aplicación de una sostenida política pública de reducción de los efectos de desempleo e inequidad que se manifestaron profundamente desde la devaluación de la moneda. En ese sentido, este trabajo -que continúa y actualiza la línea de un estudio previo relacionado con la Región Centro Ampliada, elaborado con datos provisorios del Censo 2010- pretende aportar al estudio del mercado laboral de la Región Cuyo y su relación con el desarrollo territorial, elaborando un diagnóstico de las provincias involucradas. Como fuente principal de información, se utiliza la Base de Microdatos de la eph, que releva y publica el indec, para el período comprendido entre 2003 y 2011 y datos definitivos del Censo Nacional de Población, Hogares y Viviendas 2010