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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
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
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
Argentina: the end of convertibility
Journal Article
Dollarization: will the quick fix pay off in the long run?
Journal Article
A mixed blessing: oil and Latin American economies
Working Paper
The wage impact of undocumented workers
Using administrative, individual-level, longitudinal data from the state of Georgia, this paper finds that a documented worker employed by a firm that hires undocumented workers can expect to earn 0.15 percent less than if employed by a firm that does not hire undocumented workers. However, in sectors where there are opportunities for task specialization and benefits from communication skills, documented workers can expect to earn a wage premium of less than 1 percent from being employed at a firm that also hires undocumented workers.
Working Paper
Stabilization programs and policy credibility: Peru in the 1990s
This paper uses a rational expectations macroeconomic model in which economic agents formulate the probability about the sustainability of the economic policy?that is, policy credibility?using current and lagged values of government expenditures and lagged values of the inflation rate. The estimation of the model is based on Hamilton?s switching regime procedure. The contribution of this paper is the empirical estimation of the credibility of the stabilization program implemented in Peru in August 1990. The results of the estimation show that there are two different regimes in the government ...