A traditional way of thinking about the exchange rate (XR) regime and capital account openness has been framed in terms of the "impossible trinity" or "trilemma", in which policymakers can only have 2 of 3 possible outcomes: open capital markets, monetary independence and pegged XRs. This paper...

Until the eruption of the 2007-2008 international crisis, the decade was characterized by a high growth of credit –especially credit lines for consumption– and of GDP in a large part of the developed and developing worlds. By the end of the period, the process coincided with increasing...

This paper develops a dynamic stochastic general equilibrium(DSGE) model for a small open economy (SOE) that can be calibrated to simulate the macro dynamics of a semi-industrialized developing country like Argentina. We consider a multilateral non-commodity trade environment, with the U.S.A....

The profit-maximizing and oligopoly bank model developed by Bresnahan and Lau allows determining the degree of market power held by an average bank. The equilibrium price equation includes a mark up, which is not used in the case of perfect competition but which is partially used in the case of...

This paper aims at identifying the underlying reasons for substantial accumulation of foreign reserves, a strategy currently followed by a large number of countries. To this end, it first studies international liquidity conditions and individual country demand for reserves. It then analyses...

This paper builds a DSGE model for a SOE in which the central bank systematically intervenes both the domestic currency bond and the FX markets using two policy rules: a Taylor-type rule and a second rule in which the operational target is the rate of nominal currency depreciation. For this, the...

Economic policy usually faces a number of risks and uncertainties, as a byproduct of the changing nature of signals, the economic structure, the interaction of aggregate variables, the mutations in the behavior of economic agents and their reaction to policy decisions. It is generally...

We estimate a “Hybrid New-Keynesian Phillips Curve” for Argentina between 1993 and 2007. We extend the model to a small open economy, considering separately the influence of nominal devaluation and foreign inflation on domestic prices. For the whole sample, we find that forward and...

This paper examines the relationship between stock market development and economic growth in case of Argentina's economy. I apply Granger causality and exogeneity tests based on VEC (vector error correction) models with monthly data covering the period 1993:1-2010:8. The results show that the...