Publication Date
2024
Description
Monetary policy in Latin America has evolved in five different phases. The first one is characterized by the establishment of the first central banks adhering to a gold standard. The second phase is marked by the abandonment of the gold standard and the adoption of discretionary over rules based monetary policy. The third phase consists in the generalized adoption of developmental and inward industrialization goals by central banks. The fourth phase places price stability as the key overriding objective of monetary policy. The last phase focusses on the adoption of inflation targeting within an open economy context. The evolution of monetary policy in the region is closely related to the developments in the external sector and with the needs associated with the integration with the global economy. The paper will emphasize the relative difficulties of insulating the region from external monetary and financial volatility and the limitations faced by monetary institutions to promote economic development with price stability.
Type
Working Paper(unpublished)
Department
Economics