We develop the implications of devaluation cycles for real exchange rates in a two-sector small open economy with a cash-in-advance constraint. Policy-makers are office-motivated politicians. Voters have incomplete information on the competence and the opportunism of incumbents. Devaluation acts...

We study the relationship between exchange-rate regime announcements and exchange-rate dynamics around government changes by combining the IMF de jure and the Reinhart and Rogoff de facto exchange-rate regime classifications. Using monthly data from Latin American democracies, we do not identify...

This paper studies Latin American exchange rate regimes since 1960. We model government exchange rate regime choice, constrained by politics. The model implies that the larger the tradable sectors exposed to international competition, the less likely is the maintenance of a fixed exchange rate...