In this paper, we explore the advantages and disadvantages of a monetary union between Mercosur countries in light of the recent European experience. We address the issue both from the perspective of the traditional optimal currency area (OCA) theory as w

This paper discusses Argentina?s reaction to the capital inflows of the early and its policy response to the capital flight due to the Tequila crisis of 1995. Rather than imposing capital controls, Argentina chose to play by the "rules of the game" implem

In a series of papers we have developed the notion that net foreign assets could be better approximated by capitalizing the net investment income line of the balance of payments statistics. Hidden assets or changes in financial costs may change the net return of net foreign assets even when the...

The authors analyze the dynamics of inflation that arise from fiscal deficits caused by the noncooperative behavior of interest groups. The 'state' variable is the degree of financial adaptation, a proxy for the share of wealth agents hold in alternatives to domestic currency. As financial...

In this book, Federico Sturzenegger and Mariano Tommasi propose formal models to answer some of the questions raised by the recent reform experience of many Latin American and East European countries. They apply common standards of analytical rigor to the study of economic and political...