We examine the impact of financial liberalization on fixed investment in Mexico using
establishment-level data from the manufacturing sector. In addition to analyzing changes in cash-…

The recent currency and financial crises in emerging markets have reignited the debate on
viable exchange rate regimes for small, open economies. One common element in all of …

An important question in macroeconomics has been how the transmission mechanism of
monetary policy works. In particular, the question of whether there exists a credit channel for …

Foreign exchange intervention is widely used as a policy tool, particularly in emerging markets,
but many facets of this tool remain limited, especially in the context of flexible exchange …

Latin America’s central banks have made substantial progress towards delivering an
environment of price stability that is supportive of sustainable economic growth. We review these …

Peru stands out among Latin American countries as an example of successful economic
reforms over the past decade. This comprehensive look at Peru's economy traces that country's …

In this paper we analyze the incidence of the VAT and its effects on the income distribution.
To identify these effects, we rely on two tax reforms undertaken in Mexico that increased the …

This paper develops a target zone model for the exchange rate where the expected realignment
is an increasing function of the distance of the exchange rate from the central parity, as …

Do governments in Latin America tend to be optimistic when preparing budgetary
projections? We address this question by constructing a novel dataset of the authorities’ fiscal …

The fiscal policy response to the COVID-19 shock in most LAC countries was much larger
than during the GFC, suggesting fiscal space was not as tight as expected. We argue that it is …