Quels régimes de change pour les marchés émergents ? Les solutions de coins en question

International audienceLes crises de change des années 90 se sont produites dans un contexte d'intégration financière internationale croissante. Elles ont relancé le débat relatif au choix du régime de change. Le triangle éternel de Krugman (1998) permet de comprendre les termes de ce débat. Ce triangle représente les trois attributs du système monétaire international, à savoir l'ajustement, la confiance et la liquidité

Disentangling business cycles and macroeconomic policy in Mercosur: a VAR and unobserved components model approaches

This paper analyses the feasibility of a monetary union within the Mercosur, focusing on cycle synchronicity. Three questions are addressed, concerning respectively the features of shocks hitting each member, the impact of exchange rate regime differences on countries' responses and the share of common and idiosyncratic components in shocks and policy responses. Shocks are identified through identical country-VARs. This paper concludes that there exists a weak cycle synchronization, due to asymmetric shocks and divergences in policy responses. The endogenous approach in OCA theory can advise the adoption of a common nominal anchor, in order to speed up convergence.Business Cycles, OCA; Co-movement; VAR; Unobserved components model; Mercosur

Integration, Cooperation and the Financing of Innovation

The purpose of this paper is to develop a joint analysis of the organizational and financial flexibility of the innovative firm. In this way, we complete by determinants linked to financing factors the choice between integration and inter-firms co-operative agreements. We deduce the superiority of co-operation to resolve the specialization-adaptability dilemma which faced the innovative firm.financing, innovation, integration, cooperation

Responses of monetary authorities in emerging economies to international financial crises : what do we really know?

This paper analyses policy options available for emerging economies to cope with the financial crises. A seminal paper on this question has been published by Kaminsky et al. (2005). Their main conclusion was that developing countries exhibit pro-cyclical fiscal and monetary policies, amplifying the destabilizing effects of capital inflows. The global financial crisis of 2008-09 had led to a renewed interest of the analysis concerning economic policies responses in emerging countries to financial crises. A growing number of studies have provided new empirical evidences according to which emerging economies tend to adopt more frequently counter-cyclical policies to face crises. The main purpose of this paper is to survey the literature on policy responses in emerging countries to financial crises. More precisely, we identify what are the main factors explaining the behavior of monetary policy during financial crises. Two main lessons can be drawn. On the one hand, initial conditions matter. In other words, the ability to face financial crises depends on pre-crisis vulnerabilities. On the other hand, the currency mismatch appears as one of the main impediments to conduct countercyclical monetary policies.peer-reviewe

The institutional failures of International Monetary Fund conditionality

The conditionality employed by the International Monetary Fund (IMF) in its lending policy is one of the main themes of controversy in the debate on the new international financial architecture. The purpose of this paper is to propose an analytical framework integrating the diverse explanations of the failure of IMF conditionality. Our analysis is based on the idea that the IMF is a key player in the running of markets in a global economy. More precisely, we explain that most of the criticisms concerning conditionality should be analyzed through what we agree to call the institutional failures of IMF conditionality. These institutional failures must be appreciated at two complementary levels: the first level refers to the intrinsic bureaucratic bias of the IMF while the second deals with the inability of the IMF to manage the institutional change required for the development of market processes and hence to maintain the institutional order in recipient countries. Although the first level failures have been particularly well studied via the international public choice approach, those of the second are, at best, often reduced to a simple statement. However, analyzing both levels of institutional failure of the IMF together is not without implications for the way in which the reforms of conditionality are conceived. Indeed, by including an analysis of the second level of failures, i.e. those relating to the relationship between conditionality and domestic institutional change, the recommendation of ex-ante conditionality emanating from the public choice approach, which tackles the first level of failures, will be invalidated. Instead a new approach will be proposed that suggests the separation of the role of the IMF as financial backer from its role as adviser to countries confronted by the globalization process.International Monetary Fund (IMF)

External Shocks and Monetary Policy in a Small Open Oil Exporting Economy

To investigate the dynamic effect of external shocks on an oil exporting economy, we estimate, using Bayesian approach, a DSGE model based on the features of the Algerian economy. The main purpose is to investigate the dynamic effect of four external shocks (oil price shock, USD/EUR exchange rate shock, international inflation shock and international interest rate shock) and to examine the appropriate monetary policy strategy for Algerian economy, given its structural characteristics and the pattern of the external shocks. We analyze the impulse response functions of our external shocks according to alternative monetary rules. The welfare cost associated with each monetary policy rule has been considered. Our main findings show that, over the period 1990Q1-2010Q4, core inflation monetary rule allows better to stabilize both output and inflation. This rule also appears to be the best way to improve a social welfare.Monetary policy, external shocks, oil exporting economy, Algeria, DSGE model.

Does a Monetary Union protect again foreign shocks? An assessment of Latin American integration using a Bayesian VAR

This paper analyses the monetary consequences of the Latin-American trade integration process. We consider a sample of five countries –Argentina, Brazil, Chile, Mexico and Uruguay- spanning the period 1991-2007. The main question raised pertains to the feasibility of a monetary union between L.A. economies. To this end, we study whether this set of countries is characterized by business cycle synchronization with the occurrence of common shocks, a strong similarity in the adjustment process and the convergence of policy responses. We focus especially our attention on two points. First, we try to determine to what extent international disturbances influence the domestic business cycles through trade and/or financial channels. Second, we analyze the impact of the adoption of different exchange rate regimes on the countries' responses to shocks. All these features are the main issues in the literature relative to regional integration and OCA process.bayesian VAR ; business cycles ; Latin American countries ; optimum currency area

Financial Liberalisation and Stability of the Financial System in Emerging Markets: the institutional dimension of financial crises

Emerging economies, which have implemented since the end of the 80's a process of financial liberalisation, are confronted at the same time to banking crisis. The latter highlight the role played by the institutional framework in the process of financial liberalisation. The objective of this paper is to go through the usual alternative too much/ too little market in order to explain that the success of any liberalisation process relies on the complementarity between market and intermediation. The point is that the solution to financial instability is to be found within the institutional dynamics in which emerging economies may benefit from intermediation in order to enforce the market process.market and institutions, financial liberalisation, financial crisis, emerging markets

Modeling the impact of real and financial shocks on Mercosur: the role of the exchange rate regime

This paper studies to what extent the diversity of exchange rate regimes within Mercosur exerts an influence on the feasibility of a monetary union in this area. A semi-structural VAR model is built for each country, including a set of international and domestic variables. Based on impulse response functions and forecast error decomposition, we conclude that differences of exchange rate regime explain significantly the divergences of economic dynamics triggered by foreign or domestic shocks. Second, we decompose the structural innovations generated by each country model into unobservable common and idiosyncratic components, using a state-space model. This last exercise, intended to assess the degree of policy coordination between the Mercosur members, did not disclose any common component for the structural innovations generated by the three national models.co-movement ; Cycles ; Mercosur ; optimum currency area ; unobserved components model

Monetary Integration Issues in Latin America: A Multivariate Assessment

This paper assesses the monetary consequences of the Latin-American integration process. Over the period 1991-2007, we analyze a sample of five Latin-American countries focusing on the feasibility of a monetary union between L.A. economies. To this end, we study the issue of business cycle synchronization with the occurrence of common shocks. First, we assess the international disturbances influence on the domestic business cycles. Second, we analyze the impact of the adoption of different exchange rate regimes on the countries responses to shocks.Business cycles, OCA, Bayesian VAR, Latin American countries