By Sebastian Edwards
This volume's essays, written by means of recognized lecturers and coverage analysts, speak about the influence of elevated capital mobility on macroeconomic functionality. The authors spotlight the main enough how you can deal with the transition from a semi-closed economic climate to a semi-open one. also, matters with regards to the dimension of openness, financial keep watch over, optimum trade charges regimes, sequencing of reforms, and genuine alternate price dynamics less than various levels of capital mobility are rigorously analyzed; parts lined contain Europe, the Asian Pacific area, and Latin the US.
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Extra info for Capital Controls, Exchange Rates, and Monetary Policy in the World Economy
World Development 13: 893-916. (1986). The Role of the Real Exchange Rate in Macroeconomic Adjustment: The Case of Chile, 1973-82. Paper presented at the Central Bank of Ecuador Conference on Trade Liberalization, Quito, January 1992. ). (1985). Liberalization with Stabilization in the Southern Cone of Latin America. World Development 13: 863-66. Cuadra, Sergio de la, and Salvador Valdes. (1992). Myths and Facts about Financial Liberalization in Chile. In Brock (1992): 11-101. Dornbusch, Rudiger.
The combined liberalization and stabilization programs seemed to be upset by the capital imports that inundated Chile in 1978-82. That country's fiscal deficit had reached 25 percent of GDP in 1973, but it was brought under control by 1977 and 1978, making financial stabilization for the first time feasible. At the same time Chile moved toward free trade: Nontariff barriers were first converted to tariff equivalents, and then the tariff rates were systematically lowered. From an average of 94 percent in 1973, average tariff rates fell to 44 percent at the end of 1975, 33 percent at the end of 1976, 18 percent at the end of 1977, 12 percent at the end of 1988, and 10 percent after 1979.
Current policy Current economic policy is directed at containing inflation and reducing the exploding current account deficit. To this end the current plan aims to 7 See Mundell (1990, 1992a) for analysis of how demographics affects the balance of payments; and Kim (1992) for a recent examination of stages in the balance of payments in several countries with some focus on Korea. 30 Robert Mundell keep wage increases to 5 percent, has put curbs on imported goods, and encouraged the substitution of domestic-made machinery.