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Journal Article
The 'curse' of Venezuela
Working Paper
Is tighter fiscal policy expansionary under fiscal dominance? Hypercrowding out in Latin America
We test for hypercrowding out as a signal of market concerns over fiscal dominance in five Latin American countries. Hypercrowding out occurs when fiscally dominated governments domestic credit demands are perceived as so intrusive to a nations financial system that a move towards fiscal surplus lowers interest rates and increases growth. We sample five Latin American countries to test for these relationships. Judged by the results of vector error correction models, three nations test clearly positive, suggesting market concern despite their recent efforts towards fiscal balance.
Journal Article
The New Mexico economy: outlook for 1989
Working Paper
Capital account liberalization and disinflation in the 1990s
As a way of addressing arguments in the literature (Rodrik, 1998) that the act of capital account liberalization leads to inflation, we present a simple theoretical model in which capital account liberalization raises the absolute value of the elasticity of money demand because agents have broader money holding options than under a closed capital account. The central bank maximizes seigniorage, balancing the benefits of higher inflation against potential losses of foreign currency reserves. The optimum seigniorage-maximizing rate of inflation falls when capital controls are loosened, as a ...
Journal Article
Forecasting the Louisiana economy
William C. Gruben and Donald W. Hayes have constructed a forecasting model that predicts mild overall growth in the Louisiana economy in 1991. The model predicts expansion in seven of nine economic indicators: the rig count, the civilian labor force, nonagricultural employment, housing permits, real personal income, mining, and sales tax revenue. Only durable and nondurable goods manufacturing will decline, according to the forecast. Gruben and Hayes conclude that while Louisiana is likely to experience an economic expansion in 1991, a boom is unlikely.
Journal Article
Understanding the Texas unemployment rate
Working Paper
Capital account liberalization and disinflation in the 1990s
This paper addresses the potential link between two relatively surprising international economic trends of the 1990s. The first is global disinflation. Why did inflation fall so quickly, even in countries with long histories of high inflation? Latin America?s average inflation rate, for example, fell from over 400% in 1990 to under 10% in 1999. A second puzzle is why so many countries opened their capital accounts in the 1990s, despite warnings regarding the risk of currency and banking crises. Are these two developments related? Does capital account liberalization facilitate disinflation by ...
Journal Article
Brazil: the first financial crisis of 1999