The Mexican Peso Crisis

Author : Mr.Paul R. Masson,Pierre-Richard Agénor
Publisher : International Monetary Fund
Page : 36 pages
File Size : 47,5 Mb
Release : 1996-01-01
Category : Business & Economics
ISBN : 9781451929096

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The Mexican Peso Crisis by Mr.Paul R. Masson,Pierre-Richard Agénor Pdf

This paper examines credibility and reputational factors in explaining the December 1994 crisis of the Mexican peso. After reviewing events leading to the crisis, a model emphasizing the inflation-competitiveness trade-off is presented to explain the formation of devaluation expectations. Estimation results indicate that investors appear to have seriously underestimated the risk of devaluation, despite early warning signals. The collapse of confidence that followed the December 20 devaluation may have been the result of a shift in the perceived commitment of the authorities to exchange rate stability.

Author : Anne Marie Goetz,John H. Humphrey,Naila Kabeer,Stephany Griffith-Jones
Publisher : Unknown
Page : 128 pages
File Size : 40,5 Mb
Release : 1996
Category : Electronic
ISBN : 1858640342

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Compensating for institutional exclusion? by Anne Marie Goetz,John H. Humphrey,Naila Kabeer,Stephany Griffith-Jones Pdf

Author : Riordan Roett
Publisher : Lynne Rienner Pub
Page : 130 pages
File Size : 48,5 Mb
Release : 1996-01
Category : Business & Economics
ISBN : 1555876676

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The Mexican Peso Crisis by Riordan Roett Pdf

Author : Paul R. Masson
Publisher : Unknown
Page : 36 pages
File Size : 49,5 Mb
Release : 2006
Category : Electronic
ISBN : OCLC:1291214434

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The Mexican Peso Crisis by Paul R. Masson Pdf

This paper examines credibility and reputational factors in explaining the December 1994 crisis of the Mexican peso. After reviewing events leading to the crisis, a model emphasizing the inflation-competitiveness trade-off is presented to explain the formation of devaluation expectations. Estimation results indicate that investors appear to have seriously underestimated the risk of devaluation, despite early warning signals. The collapse of confidence that followed the December 20 devaluation may have been the result of a shift in the perceived commitment of the authorities to exchange rate stability.

Author : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs
Publisher : Unknown
Page : 676 pages
File Size : 45,7 Mb
Release : 1995
Category : Business & Economics
ISBN : LOC:00035916222

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The Mexican Peso Crisis by United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs Pdf

Author : Sebastian Edwards
Publisher : Unknown
Page : 56 pages
File Size : 53,6 Mb
Release : 1997
Category : Financial crises
ISBN : UCSD:31822023042468

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The Mexican Peso Crisis by Sebastian Edwards Pdf

The Mexican crisis of 1994 raised, throughout the world, a number of questions about the sustainability -- and even the merits -- of the market oriented reform process in Latin America and other regions. Understanding the way events unfolded in Mexico during the early 1990s continues to be fundamentally important to assess the mechanics of currency crises. More importantly, perhaps, the eruption of the East Asian currency crises in the summer and fall of 1997 has raised the question of whether the lessons from Mexico have indeed been learned by policy makers, private sector analysts and international civil servants. More specifically, as a result of the recent events in South East Asia, many observers have argued that the international financial organizations -- the IMF and the World Bank -- and the governments of the advanced countries have failed to revamp the early warning system that was supposed to prevent a repetition of a Mexico-style crisis. This paper analyzes the causes behind the Mexican crisis, emphasizing the role of capital inflows, inflationary inertia and real exchange rate overvaluation. I also ask a number of questions regarding the predictability of the crisis: Should Wall Street analysts have known that things were getting out of hand? And if they did, why didn't they alert their clients? And, how much did officials at the US Treasury know about the depth of the Mexican problems? And, what was the role of the media? I conclude that although the US Treasury was fully aware of what was going on, most private sector analysts were unaware of the seriousness of the situation.

Author : Douglas W. Arner
Publisher : Unknown
Page : 66 pages
File Size : 51,5 Mb
Release : 1996
Category : Capital market
ISBN : STANFORD:36105061862699

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The Mexican Peso Crisis by Douglas W. Arner Pdf

Author : Ms.Inci Ötker,Ceyla Pazarbasioglu
Publisher : International Monetary Fund
Page : 38 pages
File Size : 50,6 Mb
Release : 1995-11-01
Category : Business & Economics
ISBN : 9781451853544

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Speculative Attacks and Currency Crises by Ms.Inci Ötker,Ceyla Pazarbasioglu Pdf

This paper estimates a speculative attack model of currency crises in order to identify the role of economic fundamentals and any early warning signals of a potential currency crisis. The data from the Mexican economy was used to illustrate the model. Based on the results, a deterioration in fundamentals appears to have generated high one-step-ahead probabilities for the regime changes during the sample period 1982-1994. Particularly, increases in inflation differentials, appreciations of the real exchange rate, foreign reserve losses, expansionary monetary and fiscal policies, and increases in the share of short-term foreign currency debt appear to have contributed to the market pressures and regime changes in that period.

Author : Jocelyn Horne
Publisher : Unknown
Page : 22 pages
File Size : 49,9 Mb
Release : 1996
Category : Devaluation of currency
ISBN : 1864082801

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External Sustainability by Jocelyn Horne Pdf

Author : C. Randall Henning
Publisher : Peterson Institute
Page : 124 pages
File Size : 53,5 Mb
Release : 1999
Category : Business & Economics
ISBN : 0881322717

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The Exchange Stabilization Fund by C. Randall Henning Pdf

The Exchange Stabilization Fund (ESF) holds more than $40 billion that is at the disposal of the US Secretary of the Treasury for use in foreign exchange intervention and international financial support operations. Its use in the Mexican rescue package of 1995 brought the ESF into the public spotlight for the first time in recent years, and it has been deployed in Brazil and several Asian crisis countries as well. Its availability for such packages and its total control by the Treasury secretary have therefore become very controversial. Randall Henning's study maintains that the Fund is an important element of US foreign policy and economic policy and that it should remain under the exclusive control of the Treasury, but that Congress should exercise effective oversight. Henning also covers the legislative history of the ESF and outlines the principles by which the Fund should be administered.

Author : Carol Wise,Leslie Elliott Armijo,Saori N. Katada
Publisher : Brookings Institution Press
Page : 258 pages
File Size : 52,9 Mb
Release : 2015-03-10
Category : Political Science
ISBN : 9780815724773

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Unexpected Outcomes by Carol Wise,Leslie Elliott Armijo,Saori N. Katada Pdf

This volume documents and explains the remarkable resilience of emerging market nations in East Asia and Latin America when faced with the global financial crisis in 2008-2009. Their quick bounceback from the crisis marked a radical departure from the past, such as when the 1982 debt shocks produced a decade-long recession in Latin America or when the Asian financial crisis dramatically slowed those economies in the late 1990s. Why? This volume suggests that these countries' resistance to the initial financial contagion is a tribute to financial-sector reforms undertaken over the past two decades. The rebound itself was a trade-led phenomenon, favoring the countries that had gone the farthest with macroeconomic restructuring and trade reform. Old labels used to describe "neoliberal versus developmentalist" strategies do not accurately capture the foundations of this recovery. These authors argue that policy learning and institutional reforms adopted in response to previous crises prompted policymakers to combine state and market approaches in effectively coping with the global financial crisis. The nations studied include Korea, China, India, Mexico, Argentina, and Brazil, accompanied by Latin American and Asian regional analyses that bring other emerging markets such as Chile and Peru into the picture. The substantial differences among the nations make their shared success even more remarkable and worthy of investigation. And although 2012 saw slowed growth in some emerging market nations, the authors argue this selective slowing suggests the need for deeper structural reforms in some countries, China and India in particular.

Author : Robert A. Pastor
Publisher : Peterson Institute for International Economics
Page : 240 pages
File Size : 43,9 Mb
Release : 2001
Category : Business & Economics
ISBN : UCSD:31822031045198

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Toward a North American Community by Robert A. Pastor Pdf

The pros, cons and potential of NAFTA are analyzed in this short, detailed text which employs extensive comparison with the European Union. He discusses the EU's regional and cohesion policies, highlighting the intent of these policies to reduce disparities between rich and poor countries. Pastor (international relations, Emory U.) then turns to Vicente Fox's agenda to redefine NAFTA and provides in-depth proposals to make Fox's plan a reality, addressing trade, transportation, infrastructure, common currency, customs and immigration, energy, regional development, and education. c. Book News Inc.

Author : Jeffrey Sachs,Aaron Tornell,Andrés Velasco
Publisher : Unknown
Page : 68 pages
File Size : 53,7 Mb
Release : 1995
Category : Currency question
ISBN : UCSD:31822023402399

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The Collapse of the Mexican Peso by Jeffrey Sachs,Aaron Tornell,Andrés Velasco Pdf

In the first quarter of 1995 Mexico found itself in the grip of an intense financial panic. Foreign investors fled Mexico despite very high interest rates on Mexican securities, an undervalued currency, and financial indicators that pointed to long-term solvency. The fundamental conditions of the Mexican economy cannot account for the entire crisis. The crisis was due to unexpected shocks that occurred in 1994, and the inadequate policy response to those shocks. In the aftermath of the March assassination the exchange rate experienced a nominal devaluation of around 10 percent and interest rates increased by around 7 percentage points. However, the capital outflow continued. The policy response to this was to maintain the exchange rate rule, and to prevent further increases in interest rates by expanding domestic credit and by converting short-term peso- denominated government liabilities (Cetes) falling due into dollar- denominated bonds (Tesobonos). A fall in international reserves and an increase in short-term dollar-denominated debt resulted. The government simply ended up illiquid, and therefore financially vulnerable. Illiquidity exposed Mexico to a self-fulfilling panic.

Author : Shahid Javed Burki,Sebastian Edwards
Publisher : World Bank Publications
Page : 44 pages
File Size : 40,6 Mb
Release : 1996
Category : Business & Economics
ISBN : 0821336290

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Latin America After Mexico by Shahid Javed Burki,Sebastian Edwards Pdf

"Analyzes Mexico's Dec. 1994 currency devaluation and impact of resulting crisis on other countries in the region. Contends that crisis acted as a 'wake-up call,' prompting many countries to implement policy reforms"--Handbook of Latin American Studies, v. 57.

Author : M. Angeles Villareal
Publisher : DIANE Publishing
Page : 24 pages
File Size : 55,6 Mb
Release : 2011
Category : History
ISBN : 9781437941104

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Mexican Economy After the Global Financial Crisis by M. Angeles Villareal Pdf

This is a print on demand edition of a hard to find publication. Mexico and the U.S. have strong economic, political, and social ties, which have direct policy implications related to bilateral trade, economic competitiveness, migration, and border security. The global financial crisis that began in 2008 and the U.S. economic downturn had strong adverse effects on the Mexican economy. Contents of this report: (1) Intro.; (2) Overview of Mexico¿s Economy: Current Conditions; Ties to the U.S. Economy; Past Economic Policies and Reforms; Effects of the Global Financial Crisis; (3) Effect on Mexico¿s GDP Growth; Exports; Employment; Mfg.; Energy Sector; Foreign Direct Investment Declines; Fall in Remittances; (4) Structural and Other Economic Challenges; (5) Implications for the U.S. Illus.