Dollar Clamp for Beginners
Keywords:
Dollar Clamp, Imports , Exports, Pesos, DistortionsAbstract
This paper models the effects of restrictions on access to the foreign exchange market known as the “dollar clamp” (capital controls). In our modeling, the dollar clamp operates in two ways. On the one hand, as a tax on exports combined with a subsidy on imports, on the other hand, as a mechanism to encourage the holding of pesos. The model replicates the movements observed in the exchange rate gap, prices, activity and exports that are observed when installing or lifting a dollar clamp. The common element in all the specifications analyzed is that dollar clamp produces welfare-reducing distortions.
Downloads
References
Acharya, V. V. y Krishnamurthy, A. (2018). Capital flow management with multiple instruments. Technical report: National Bureau of Economic Research.
Agénor, P.-R. (1990a). Exchange Restrictions and Devaluation Crises.
Agénor, P.-R. (1990b). Parallel currency markets in developing countries: theory, evidence, and policy implications. Evidence, and Policy Implications (December 1990). IMF Working Paper, (90/114).
Agénor, P.-R. (1990c). Stabilization policies in developing countries with a parallel market for foreign exchange: A formal framework. Staff Papers, 37(3), 560–592.
Agosin, M. R. y Huaita, F. (2012). Overreaction in capital flows to emerging markets: Booms and sudden stops. Journal of International Money and Finance, 31(5), 1140-1155, recuperado de https://doi.org/https://doi.org/10.1016/j.jimonfin.2011.12.015 http://www.sciencedirect.com/science/article/pii/S0261560611002002.
Avila, J., Canis, C., Szewach, E. et al. (1989). El control de cambios en Argentina. Fundación de Investigaciones Económicas Latinoamericanas (FIEL), recuperado de http://www.fiel.org/publicaciones/Libros/LIBRO_1309961498703.pdf
Bengui, J. y Bianchi, J. (2018). Macroprudential policy with leakages. Technical report: National Bureau of Economic Research.
Bhagwati, J. N. (1978). Foreign Trade Regimes and Economic Development: Anatomy and Consequences of Exchange Control Regimes. National Bureau of Economic Research, Inc https://EconPapers.repec.org/RePEc: nbr:nberbk:bhag78-1.
Caballero, R. J., & Krishnamurthy, A. (1998). Emerging market crises: an asset markets perspective (No w6843). National Bureau of Economic Research.
Caballero, R. J., & Krishnamurthy, A. (2001). International and domestic collateral constraints in a model of emerging market crises. Journal of monetary Economics, 48(3), 513-548.
Calvo, G. A. y Rodriguez, C. A. (1977). A model of exchange rate determination under currency substitution and rational expectations. Journal of Political Economy, 85(3), 617–625.
Calvo, G. A. (1998). Capital flows and capital-market crises: the simple economics of sudden stops. Journal of applied Economics, 1(1), 35-54.
Cavallo, E. A. (2019). International capital flow reversals (No. IDB-WP-1040). IDB Working Paper Series.
Cerra, M. V. (2016). Inflation and The Black Market Exchange Rate in a Re- pressed Market: A Model of Venezuela. International Monetary Fund.
Diamand, M. (1985). El péndulo argentino: ¿hasta cuándo? Cuadernos del Centro de Estudios de la Realidad Económica, 1(1).
Dornbusch, R. (1986). Special exchange rates for capital account transactions. The World Bank Economic Review, 1(1), 3-33.
Guidotti, P. E., Sturzenegger, F., Villar, A., de Gregorio, J., & Goldfajn, I. (2004). On the consequences of sudden stops [with comments]. Economia, 4(2), 171-214.
Hausmann, R. (1997). Adoption, Management, and Abandonment of Multiple Exchange Rate Regimes with Import Control: The Case of Venezuela. In Parallel Exchange Rates in Developing Countries (pp. 145–187). Berlin: Springer.
Heymann, D., & Navajas, F. (1989). Conflicto distributivo y déficit fiscal. Notas sobre la experiencia argentina, 1970-1987. Desarrollo Económico, 29(115), 309-329.
Ilzetzki, E., Reinhart, C. M., y Rogoff, K. S. (2019). Exchange arrangements entering the twenty-first century: Which anchor will hold? The Quarterly Journal of Economics, 134(2), 599-646.
International Monetary Fund (2020). Annual Report on Exchange Arrangements and Exchange Restrictions 2019. Washington: DC, IMF.
Kaminsky, G. L. y Reinhart, C. M. (1999). The twin crises: the causes of banking and balance-of-payments problems. American economic review, 89(3), 473–500.
Kiguel, M. A., Lizondo, J. S., y O’Connell, S. A. (1997). Parallel Exchange Rates in Developing Countries. Berlin: Springer.
Kiguel, M. A., & Neumeyer, P. A. (1995). Seigniorage and inflation: the case of Argentina. Journal of Money, Credit and Banking, 27(3), 672-682.
Korinek, A. (2011). The new economics of prudential capital controls: A research agenda. IMF Economic Review, 59(3), 523-561.
Korinek, A. y Sandri, D. (2016). Capital controls or macroprudential regulation? Journal of International Economics, 99, S27–S42.
Mosquera, J. S. (2020). 28-D, pérdida irrecuperable de credibilidad. Repositorio UdeSA.
Rey, H. (2015). Dilemma not trilemma: the global financial cycle and monetary policy independence. No. w21162, National Bureau of Economic Research.
Sturzenegger, F. (2019). Macri’s Macro: The meandering road to stability and growth. Brookings Papers of Economic Activity, (135), 339-410.
Uribe, M. (2016). Is the Monetarist Arithmetic Unpleasant? (No. w22866). National Bureau of Economic Research.
Downloads
Published
Issue
Section
License
LicenseAuthors retain the copyright to their published work, but authorise the copying, distribution and creation of derivative works based on the original work, provided that the authorship of the work is always attributed in the manner specified by the author or licensor of the work. This licence does not, however, permit the use of the work or any derivative works for commercial purposes.
For their part, authors retain the rights to the work and guarantee that it is unpublished and original. Furthermore, authors grant *Desarrollo Económico. Revista de Ciencias Sociales* the non-exclusive right to publish their work electronically. Consequently, authors may retain the final versions and disseminate them in institutional or subject-specific repositories, on personal websites, or for any other relevant purpose, provided that the original source of publication is cited.
