Real Exchange Rates, Dollarization and Industrial Employment in Latin America

31 Pages Posted: 25 Apr 2011

See all articles by Arturo José Galindo

Arturo José Galindo

Inter-American Development Bank

Alejandro Izquierdo

Inter-American Development Bank (IDB) - Research Department

José Ramón Montero

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: October 2006

Abstract

This paperuses a panel dataset on industrial employment and trade for 9 Latin American countries for which liability dollarization data at the industrial level is available. It tests whether real exchange rate fluctuations have a significant impact on employment, and analyze whether the impact varies with the degree of trade openness and liability dollarization. Econometric evidence supports the view that real exchange rate depreciations can impact employment growth positively, but this effect is reversed as liability dollarization increases. In industries with high liability dollarization, the overall impact of a real exchange rate depreciation can be negative.

Suggested Citation

Galindo, Arturo José and Izquierdo, Alejandro and Montero, José Ramón, Real Exchange Rates, Dollarization and Industrial Employment in Latin America (October 2006). IDB Working Paper No. 479, Available at SSRN: https://ssrn.com/abstract=1820052 or http://dx.doi.org/10.2139/ssrn.1820052

Arturo José Galindo (Contact Author)

Inter-American Development Bank ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Alejandro Izquierdo

Inter-American Development Bank (IDB) - Research Department ( email )

1300 New York Ave., NW
Washington, DC 20577
United States

José Ramón Montero

affiliation not provided to SSRN

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