IS-LM-BP in the Pampas
Céspedes, L. F., Chang, R. & Velasco, A.
(2003).
IS-LM-BP in the Pampas.
(IMF Staff Papers Special Issue).
International Monetary Fund.
(2003).
IS-LM-BP in the Pampas.
(IMF Staff Papers Special Issue).
International Monetary Fund.
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 policies have nonstandard 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.