Politics and Exchange Rates: A Cross-Country Approach to Latin America

53 Pages Posted: 19 Apr 2011

See all articles by Jeffry Frieden

Jeffry Frieden

Harvard University

Piero Ghezzi

Deutsche Bank

Ernesto Stein

Inter-American Development Bank (IDB)

Date Written: October 2000


This paper explores the impact of political economy factors on exchange rate policy in Latin America. It studies the determinants of the choice of exchange rate regime in Latin America, placing special emphasis on political, institutional and interest group explanations. The presumption is that differences in institutional and political settings, as well as differences in economic structure, can have an effect on the choice of regime and, more generally, on exchange rate policy. In addition to these structural elements, the paper examines whether such political events as elections and changes in government affect the pattern of nominal and real exchange rates.

Suggested Citation

Frieden, Jeffry and Ghezzi, Piero and Stein, Ernesto Hugo, Politics and Exchange Rates: A Cross-Country Approach to Latin America (October 2000). IDB Working Paper No. 137, Available at SSRN: https://ssrn.com/abstract=1814683 or http://dx.doi.org/10.2139/ssrn.1814683

Jeffry Frieden

Harvard University ( email )

1737 Cambridge Street
Cambridge, MA 02138
United States

Piero Ghezzi

Deutsche Bank ( email )

31 West 52nd Street, 12th Floor
New York, NY 10019

Ernesto Hugo Stein (Contact Author)

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue, NW
Research Department
Washington, DC 20577
United States

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