Do Exchange Rate Regimes Matter For Inflation And Exchange Rate Dynamics? The Case Of Central America.

This paper makes an empirical contribution to the discussion on the optimal exchange rate regime. Using as astudy case the experience of the Central American countries, we compare the dynamics of the Real Exchange Rate (RER) and inflation persistence between dollarized economies and countries with some degree of exchange rate flexibility. Our results show that the two dollarized countries in the region, El Salvador and Panama, are quite different in terms of RER and inflation dynamics. While in El Salvador the RER spends more time away from the equilibrium level than the non-dollarized countries in the region, the opposite is true for Panama. We also find that inflation persistence in El Salvador is similar to that of the other countries, but smaller in Panama. This leads us to the conclusion that some degree of exchange rate flexibility helps countries to have a RER more aligned with its fundamentals. Nevertheless, a long-lived, highly credible dollarized economy, like Panama, can reduce inflation persistence to such an extent that RER misalignments are actually less frequent than in countries with more flexible exchange rate regimes.

Equilibrium Real Exchange Rate in Chile: Alternative Approaches

In the monetary policy framework based on inflation targeting and a floating exchange rate, it is necessary to know the equilibrium real exchange rate (RER). This paper describes models for determining the equilibrium RER of regular use at the CBC. In particular, the purchasing power parity, macroeconomic balance, and reduced-form models are discussed. We show how these paradigms are used complementarily to report the judgment of economic policymakers. We also discuss the way in which the structural surplus rule in place, under which the state saves a large part of copper income, has tended to attenuate the previous relationship between the RER and the terms of trade. This change leads to revising the ways of implementing the reduced-form models. Specifically, we suggest that, within the current fiscal policy framework, one of the fundamentals of the RER are the non-copper terms of trade rather than the aggregate terms of trade.

Constraints on the χ_(c1) versus χ_(c2) polarizations in proton-proton collisions at √s = 8 TeV

The polarizations of promptly produced χ_(c1) and χ_(c2) mesons are studied using data collected by the CMS experiment at the LHC, in proton-proton collisions at √s=8  TeV. The χ_c states are reconstructed via their radiative decays χ_c → J/ψγ, with the photons being measured through conversions to e⁺e⁻, which allows the two states to be well resolved. The polarizations are measured in the helicity frame, through the analysis of the χ_(c2) to χ_(c1) yield ratio as a function of the polar or azimuthal angle of the positive muon emitted in the J/ψ → μ⁺μ⁻ decay, in three bins of J/ψ transverse momentum. While no differences are seen between the two states in terms of azimuthal decay angle distributions, they are observed to have significantly different polar anisotropies. The measurement favors a scenario where at least one of the two states is strongly polarized along the helicity quantization axis, in agreement with nonrelativistic quantum chromodynamics predictions. This is the first measurement of significantly polarized quarkonia produced at high transverse momentum