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IS-LM-BP in the Pampas

Author

Listed:
  • Luis Felipe Cespedes
  • Roberto Chang
  • Andres Velasco

Abstract

Emerging markets (sometimes endowed with fertile pampas) have limited access to world capital markets and suffer from original sin: they cannot borrow in their own currency. Does this mean that monetary and exchange rate policy has non-standard effects in such countries? We develop a simple IS-LM-BP model with balance sheet effects to study that question. Our answer: it all depends.

Suggested Citation

  • Luis Felipe Cespedes & Roberto Chang & Andres Velasco, 2002. "IS-LM-BP in the Pampas," NBER Working Papers 9337, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:9337
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    References listed on IDEAS

    as
    1. Luis Felipe Céspedes & Roberto Chang & Andrés Velasco, 2004. "Balance Sheets and Exchange Rate Policy," American Economic Review, American Economic Association, vol. 94(4), pages 1183-1193, September.
    2. Luis Felipe Céspedes & Roberto Chang & Andrés Velasco, 2002. "Dollarization of Liabilities, Net Worth Effects, and Optimal Monetary Policy," NBER Chapters, in: Preventing Currency Crises in Emerging Markets, pages 559-600, National Bureau of Economic Research, Inc.
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    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • F0 - International Economics - - General

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