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Trade and Competitiveness in Argentina, Brazil and Chile

Not as Easy as A-B-C

image of Trade and Competitiveness in Argentina, Brazil and Chile

This book focuses on the role of exchange rate regimes, market imperfections and trade policy to support the strengthening and diversification of the tradable sector in Argentina, Brazil and Chile. Moreover, it analyses the agro-food sector, one of the pillars of the tradable sector in the region, and the role of foreign direct investment and competition policy. Overall it provides an integrated and original policy perspective on the factors underlying international competitiveness.

English

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The Impact of Exchange Rate Regimes on Real Exchange Rates in South America, 1990-2002

This chapter explores the relationship between exchange rate regimes and real exchange rates, as defined by the relative price of non-tradables to tradables, in Argentina, Brazil, Chile (A-B-C) and Mexico from 1990 to 2002. According to the literature, the real exchange rate is determined in the long run by the Balassa-Samuelson effect, but in the medium run also by government expenditure and terms of trade. Here another determinant is explored, which is exchange rate regimes. Fixed exchange rate regimes distorted relative prices of tradables to nontradables. Moreover, fixed regimes attract portfolio inflows that increase demand and prices for non-tradables. Econometric tests confirm that ...

English

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