Four essays on central banking in Latin America under balance of payments dominance

Jonathan Malagón González

Research output: ThesisDoctoral ThesisScientific

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Abstract

Flexible inflation targeting was the choice of five of the seven largest Latin American economies in the late 1990s/early 2000s. This was combined with the prior choice for more open capital accounts and greater exchange rate flexibility, which had been adopted as part of the market liberalization policies spread throughout Latin America since the mid-1980s. However, most Latin American economies are characterized by balance of payments dominance: a condition in which the short-term macroeconomic dynamics is mainly determined by the external shocks that periodically hit these economies, particularly procyclical capital flows and terms of trade shocks. One of the major complications of the region is that these shocks tend to induce procyclical responses from fiscal and monetary authorities.

This dissertation consists of four empirical essays that study key elements of central banking in Latin America in a context of balance of payment dominance. The first essay analyses the exchange rate policy throughout the concept of fear of floating. The second paper examines the impact of external shocks on financial stability and the role of Basel regulations on its mitigation. The third paper measures the financial spillovers of developed economies’ conventional and unconventional monetary policy over the Latin American financial markets. The last paper assesses the effectiveness and determinants of monetary policy rate under balance of payments dominance.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Tilburg University
Supervisors/Advisors
  • Eijffinger, Sylvester, Promotor
  • Huizinga, Harry, Promotor
Award date1 Dec 2017
Place of PublicationTilburg
Publisher
Print ISBNs978 90 5668 536 2
Publication statusPublished - 2017

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Balance of payments
Latin America
Central banking
External shocks
Fiscal
Capital flows
Authority
Macroeconomic dynamics
Unconventional monetary policy
Mitigation
Financial markets
Spillover
Financial stability
Inflation targeting
Exchange rate policy
Fear of floating
Monetary policy
Exchange rates
Basel
Terms of trade shocks

Cite this

Malagón González, J. (2017). Four essays on central banking in Latin America under balance of payments dominance. Tilburg: CentER, Center for Economic Research.
Malagón González, Jonathan. / Four essays on central banking in Latin America under balance of payments dominance. Tilburg : CentER, Center for Economic Research, 2017. 129 p.
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Malagón González, J 2017, 'Four essays on central banking in Latin America under balance of payments dominance', Doctor of Philosophy, Tilburg University, Tilburg.

Four essays on central banking in Latin America under balance of payments dominance. / Malagón González, Jonathan.

Tilburg : CentER, Center for Economic Research, 2017. 129 p.

Research output: ThesisDoctoral ThesisScientific

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PY - 2017

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AB - Flexible inflation targeting was the choice of five of the seven largest Latin American economies in the late 1990s/early 2000s. This was combined with the prior choice for more open capital accounts and greater exchange rate flexibility, which had been adopted as part of the market liberalization policies spread throughout Latin America since the mid-1980s. However, most Latin American economies are characterized by balance of payments dominance: a condition in which the short-term macroeconomic dynamics is mainly determined by the external shocks that periodically hit these economies, particularly procyclical capital flows and terms of trade shocks. One of the major complications of the region is that these shocks tend to induce procyclical responses from fiscal and monetary authorities.This dissertation consists of four empirical essays that study key elements of central banking in Latin America in a context of balance of payment dominance. The first essay analyses the exchange rate policy throughout the concept of fear of floating. The second paper examines the impact of external shocks on financial stability and the role of Basel regulations on its mitigation. The third paper measures the financial spillovers of developed economies’ conventional and unconventional monetary policy over the Latin American financial markets. The last paper assesses the effectiveness and determinants of monetary policy rate under balance of payments dominance.

M3 - Doctoral Thesis

SN - 978 90 5668 536 2

T3 - CentER Dissertation Series

PB - CentER, Center for Economic Research

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Malagón González J. Four essays on central banking in Latin America under balance of payments dominance. Tilburg: CentER, Center for Economic Research, 2017. 129 p. (CentER Dissertation Series).