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Journal Article
Monetary policy alternatives for Latin America
During the 1990s, many Latin American countries began to address their problems with recession, inflation, and unemployment through dramatic economic reforms and monetary policy strategies that included exchange rate pegs, monetary aggregate targeting, or inflation targeting. Inflation targeting, in particular, had begun to lower inflation rates and to stabilize or increase real economic growth in countries such as New Zealand, Canada, and the United Kingdom. But has inflation targeting proved as successful for Latin American economies? ; This article describes the recent history of monetary ...
Journal Article
Official dollarization and the banking system in Ecuador and El Salvador
In January 2000 Ecuador adopted the U.S. dollar as legal tender, and El Salvador followed suit in 2001. The two countries officially dollarized under quite different circumstances: Ecuador was suffering an economic and banking crisis, while El Salvador enjoyed economic stability and low inflation rates. This article studies the evolution of the banking system in these two countries before and after official, or full, dollarization. ; In Ecuador the reforms that ensued from full dollarization have improved transparency and banking performance and competitiveness, but the implementation and ...
Journal Article
Dollarization: will the quick fix pay off in the long run?
Working Paper
Employer monopsony power in the labor market for undocumented workers
Using matched employer-employee data from the state of Georgia, this paper investigates the potential for employer monopsony power in the labor market for undocumented workers. We find that the labor supply elasticity of undocumented workers is about 13 percent lower than that estimated for documented workers, suggesting that at least some of the observed wage gap between documented and undocumented workers can be explained by firms' exploiting their monopsony power. There is also evidence of some displacement, with the hiring of undocumented workers being associated with a small amount of ...
Working Paper
Undocumented worker employment and firm survivability
Do firms employing undocumented workers have a competitive advantage? Using administrative data from the state of Georgia, this paper investigates the incidence of undocumented worker employment across firms and how it affects firm survival. Firms are found to engage in herding behavior, being more likely to employ undocumented workers if competitors do. Rivals' undocumented employment harms firms' ability to survive while firms' own undocumented employment strongly enhances their survival prospects. This finding suggests that firms enjoy cost savings from employing lower-paid undocumented at ...
Journal Article
Reform fatigue: symptoms, reasons, and implications
Following a period of ambitious promarket reforms, Latin American policymakers and the public at large have entered a period of ?reform fatigue.? Initial enthusiasm for policies such as liberalized markets and a level field for investors has given way more recently to the view that ambitious promarket reforms are to blame for the region?s economic crises. The process of reform has stalled in some countries, and a few have suffered serious setbacks. ; To help explore the future of reform, this article aims to document and explain the symptoms of fatigue among the public, policymakers, and ...
Journal Article
The effect of immigration on output mix, capital, and productivity
The growing influx of immigrants into the United States has prompted concerns about potential negative effects on native workers, especially the less skilled. Such concerns have not been borne out by many studies of the effect of immigration on wages. However, the typical theoretical negative effect of immigration flows on wages may be offset by changes in other aspects of the economy, including output mix, productivity, and capital. ; This article examines the relationship between immigration and three factors-output mix, labor productivity, and capital-in the skilled and unskilled sectors ...
Journal Article
New financing trends in Latin America : an overview of selected issues and policy challenges
This article summarizes a 2007 conference that explored the nature and implications of major transformations in Latin American financial markets, such as the shift from cross-border to domestic financing and the development of domestic bond markets.
Journal Article
A mixed blessing: oil and Latin American economies
Journal Article
Argentina: the end of convertibility