Monetary Policy and the Balance of Payments in Brazil and Chile

IT IS FOUND THAT EVEN IF THEIR EXCHANGE RATES HAD REMAINED CONSTANT, BRAZIL AND CHILE WOULD HAVE HAD ALMOST COMPLETE CONTROL OVER THEIR MONEY SUPPLIES, AS LONG AS THEY WERE ABLE TO FINANCE A PAYMENTS DEFICIT. HOWEVER, IT TAKES AT LEAST TWO YEARS BEFORE AN EXOGENOUS INCREASE IN BASE MONEY IS FULLY RE...

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Veröffentlicht in:Journal of money, credit and banking credit and banking, 1976-05, Vol.8 (2), p.227-238
Hauptverfasser: Miller, Norman C., Askin, Sherry S.
Format: Artikel
Sprache:eng
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Zusammenfassung:IT IS FOUND THAT EVEN IF THEIR EXCHANGE RATES HAD REMAINED CONSTANT, BRAZIL AND CHILE WOULD HAVE HAD ALMOST COMPLETE CONTROL OVER THEIR MONEY SUPPLIES, AS LONG AS THEY WERE ABLE TO FINANCE A PAYMENTS DEFICIT. HOWEVER, IT TAKES AT LEAST TWO YEARS BEFORE AN EXOGENOUS INCREASE IN BASE MONEY IS FULLY REALIZED. BOTH COUNTRIES COMPLETELY STERILIZE ANY EFFECTS OF PAYMENTS IMBALANCE ON THEIR MONETARY BASE. THEY APPEAR TO USE CHANGES IN CENTRAL BANK CLAIMS ON THE GOVERNMENT IN THEIR STERILIZATION ACTIVITIES. FINALLY, BOTH COUNTRIES SUPPLY BASE MONEY AS IT IS NEEDED TO SUPPORT THE LEVEL OF GNP, WITH CHILE DOING SO AT A SLOWER RATE IN A BOOM AND AT A FASTER RATE IN A RECESSION. TABLES. BIBLIOGRAPHY.
ISSN:0022-2879
1538-4616
DOI:10.2307/1991743