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In: Economia: journal of the Latin American and Caribbean Economic Association, Band 12, Heft 1, S. 58-70
ISSN: 1533-6239
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In: Economia: journal of the Latin American and Caribbean Economic Association, Band 12, Heft 1, S. 58-70
ISSN: 1533-6239
In: The Decline of Latin American Economies, S. 243-290
SSRN
In: American economic review, Band 95, Heft 4, S. 1259-1275
ISSN: 1944-7981
Using a new international dataset of trade-weighed exchange rates, this paper highlights a neglected adjustment mechanism in the classical gold standard literature. Since gold-pegged countries traded extensively with economies operating more flexible monetary regimes and where parity change was a common adjustment device to systemic shocks, we show that such parity adjustments induced worldwide swings in nominal effective exchange rates. These translated into real exchange rate variations to which trade balances responded with an average elasticity of unity and in the direction of restoring external disequilibria. We conclude that some nominal exchange rate flexibility thus present in the pre-1914 system was instrumental to international payments adjustment.
In: Journal of development economics, Band 95, Heft 2, S. 212-228
ISSN: 0304-3878
World Affairs Online
In: CEPR Discussion Paper No. DP9368
SSRN
Working paper
This paper examines a much overlooked link between credit markets and formalization: since access to bank credit typically requires compliance with tax and employment legislation, firms are more likely to incur such formalization costs once bank credit is more widely available at lower cost; if so, well-functioning credit markets help foster formal employment at the expense of informal jobs. We gauge the relevance of this credit channel using the Rajan-Zingales measure of financial dependence and a difference-in-differences approach applied to household survey data from Brazil - a large emerging market where substantial changes in banking system depth and formalization ratios have taken place and for which consistent data exists. Our results show that formalization rates increase with financial deepening and the more so in sectors where firms are typically more dependent on external finance. We also decompose shifts in aggregate formalization into those within each firm size category and those associated with changes in firm size, and find that financial deepening significantly explains the former but not so much the latter.
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