Financial liberalization, structural change, and real exchange rate appreciations

• 成果类型: Article
• 署名作者: Meza, Felipe; Urrutia, Carlos
• 署名单位: Instituto Tecnologico Autonomo de Mexico
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2011.06.001
• 发表日期: 2011
• 页码: 317-328
• 关键词: Real exchange rate; financial liberalization; structural transformation

摘要

The last twenty years have witnessed periods of sustained appreciations of the real exchange rate in emerging economies. The case of Mexico between 1988 and 2002 is representative of several episodes in Latin America and Central and Eastern Europe in which countries opening to capital flows experienced large appreciations accompanied by a significant reallocation of workers towards the non-tradable sector. We account for these facts using a two sector dynamic general equilibrium model of a small open economy with frictions to labor reallocation and two driving forces: (i) A decline in the cost of borrowing in foreign markets, and (ii) differential productivity growth across sectors. These two mechanisms account together for 60% of the decline in the domestic relative price of tradables in Mexico and for a large fraction of the observed reallocation of labor across sectors. The decline in the interest rate faced by Mexico in international markets is quantitatively the most important channel. Our results are robust to the inclusion of terms of trade into the model. (C) 2011 Elsevier B.V. All rights reserved.