Chicken Soup for the New Financial Panic

For anyone that witnessed the sequence of emerging markets crises of the 1990s, yesterday’s sharp falls of the European, Asian, and Latin American financial markets must have created a sense of déjà vu all over again. Indeed, there are several similarities between the current meltdowns and those of a decade ago. But there are new […]

Sovereign Wealth Funds for Latin America?

By now it should be apparent that the hottest issue in generally hot Latin America is the furious pace of international reserves accumulation. The current level of reserves in Brazil, about US $ 145 billion, is more than double the US$ 62.7 billion level of the end of June 2006. Likewise, both Colombia and Peru […]

Latin America and the New Misalignment Politics

On June 13, U.S. Senators Baucus, Grassley, Schumer, and Graham introduced the Currency Exchange Rate Oversight Reform Act of 2007. The Act would require the Treasury to identify twice a year those countries whose currencies are “fundamentally misaligned”, of which a few ones would be given priority status if misalignment is deemed to be “caused […]

On Tropical Inflation Targeting

In his recent blog, Roberto Rigobon has directed attention to the role of fiscal policy in preventing real exchange rate appreciation in the inflation targeting (IT) regimes of Brazil, Colombia, and others. I would like to suggest a slightly broader focus, however, on the issue of what, if any, should be the role of exchange […]