Aftermaths of Current Account Crisis: Export Growth or Import Contraction?

This paper defines current account crises as current account adjustments that occur in the aftermath of a sizable reduction in capital flows. We study the characteristics of such current account adjustments, particularly whether they are executed through export growth or import contraction. We find significant differences between Asia and Latin America, with Asian countries adjusting through export growth and Latin America through import contraction. When looking at the fundamentals that explain such dissimilar behavior, we conclude that these differences are attributable to differences in the degree of openness and financial dollarization with the size of the financial sector being irrelevant. We argue that the analysis allows the conclusion that “pesified” financial sectors that insulate the domestic financial sector from exchange rate movements are better suited to deal with unstable international financial markets.

Aftermaths of current account crisis: export growth or import contraction?

This paper defines current account crises as current account adjustments that occur in the aftermath of a sizable reduction in capital flows. We study the characteristics of such current account adjustments, particularly whether they are executed through export growth or import contraction. We find significant differences between Asia and Latin America, with Asian countries adjusting through export growth and Latin America through import contraction. When looking at the fundamentals that explain such dissimilar behavior, we conclude that these differences are attributable to differences in the degree of openness and financial dollarization with the size of the financial sector being irrelevant. We argue that the analysis allows the conclusion that “pesified” financial sectors that insulate the domestic financial sector from exchange rate movements are better suited to deal with unstable international financial markets.Para cualquier uso del contenido del presente documento debe ponerse en contacto con el autor

Capital Controls, Collection Costs, and Domestic Public Debt

The implications of a large public debt for the implementation of capital controls for an economy where tax revenue collection is costly are examined. Conditions are analyzed under which policymakers will resort to capital controls to reduce the cost of recycling domestic public debt. The linkages between a costly tax collection mechanism, capital controls, am domestic government debt are explored in terms of a two-period m:x1el of optimal taxation. Numerical simulations are provided to illustrate haw capital controls are linked to different domestic public debt levels am to different degrees of efficiency in tax-revenue collection.

Currency substitution, portfolio diversification and money demand

We extend the Thomas (1985) dynamic optimising model of money demand and currency substitution to the case in which the individual has restricted or no access to foreign currency denominated bonds. In this case Currency Substitution decisions and Asset Substitution decisions are not separable. The results obtained suggest that the significance of an expected exchange rate depreciation term in the demand for domestic money provides a valid test for the presence of currency substitution. Applying this approach to six Latin American countries, we find evidence of currency substitution in Colombia, Dominican Republic and Venezuela, but not in Brazil and Chile

Prospective individual patient data meta-analysis of two randomized trials on convalescent plasma for COVID-19 outpatients

Data on convalescent plasma (CP) treatment in COVID-19 outpatients are scarce. We aimed to assess whether CP administered during the first week of symptoms reduced the disease progression or risk of hospitalization of outpatients. Two multicenter, double-blind randomized trials (NCT04621123, NCT04589949) were merged with data pooling starting when = 50 years and symptomatic for <= 7days were included. The intervention consisted of 200-300mL of CP with a predefined minimum level of antibodies. Primary endpoints were a 5-point disease severity scale and a composite of hospitalization or death by 28 days. Amongst the 797 patients included, 390 received CP and 392 placebo; they had a median age of 58 years, 1 comorbidity, 5 days symptoms and 93% had negative IgG antibody-test. Seventy-four patients were hospitalized, 6 required mechanical ventilation and 3 died. The odds ratio (OR) of CP for improved disease severity scale was 0.936 (credible interval (CI) 0.667-1.311); OR for hospitalization or death was 0.919 (CI 0.592-1.416). CP effect on hospital admission or death was largest in patients with <= 5 days of symptoms (OR 0.658, 95%CI 0.394-1.085). CP did not decrease the time to full symptom resolution