SciELO - Scientific Electronic Library Online

 
vol.63 número250Enfoque metodológico para un modelo de pronósticos de alta frecuencia para la economía mexicana índice de autoresíndice de materiabúsqueda de artículos
Home Pagelista alfabética de revistas  

Servicios Personalizados

Revista

Articulo

Indicadores

Links relacionados

  • No hay artículos similaresSimilares en SciELO

Compartir


Investigación económica

versión impresa ISSN 0185-1667

Inv. Econ vol.63 no.250 México oct./dic. 2004

 

Artículos

Capital Flows, Exchange Rate Regime, and Macroeconomic Performance in Mexico

Flujos de capital, régimen de tipo de cambio y desempeño macroeconómico en México

Carlos A. Ibarra* 

* Departamento de Economía, Universidad de las Américas, Puebla, Cholula, Pue., México, <carlos.ibarra@udlap.mx>.

Abstract:

This paper analyzes the short-term effects of foreign capital flows on aggregate demand in Mexico: their magnitude, transmission channels, and the possible influence of the country's choice of exchange rate regime. The study is motivated by the introduction of a floating system in December of 1994, in a context of renewed volatility of international capital flows. During the band period, in the early 1990s, capital flows different from foreign direct investment (FDI) had a strong effect on both consumption and investment demand. The real exchange rate and stock market prices were important transmission channels. After the adoption of the floating system, the link with consumption has persisted; the effect of capital flows on domestic investment, in contrast, has tended to disappear. The findings of the paper are consistent with the idea that the insulation of investment from the vagaries of capital flows is partly explained by an observed reduction in the correlation of the real exchange rate and the stock market price index with capital flows.

Resumen:

Este trabajo analiza los efectos a corto plazo de los flujos de capital externo en la demanda agregada en México: su magnitud, los canales de transmisión y la posible influencia en la elección del régimen del tipo de cambio del país. Para motivar este trabajo en la introducción se discute el sistema de flotación en diciembre de 1994, en un contexto de renovada volatilidad de los flujos de capital internacionales. Durante el período de la banda, a principios de los noventa, los flujos de capital diferentes de la inversión extranjera directa (IED) tenían un fuerte efecto en el consumo y en la demanda de inversión. El tipo de cambio real y los choques de los precios de las acciones fueron importantes canales de transmisión. Después de la adopción del sistema de flotación, el vínculo con el consumo ha persistido; el efecto de los flujos de capital en la inversión doméstica, en contraste, ha tendido a desaparecer. Los resultados de este trabajo son consistentes con la idea de que el aislamiento de la inversión respecto de la volatilidad de los flujos de capital se explica particularmente por una reducción en la correlación del tipo de cambio real y el índice de precios de las acciones, con los flujos de capital.

JEL Classification: F31, F32.

Texto completo disponible sólo en PDF

Full text available only in PDF format

References

Agosin, M.R., "Capital Inflows and Investment Performance: Chile in the 1990s", in Ffrench-Davis and Reisen (eds.), Capital Flows and Investment Performance. Lessons from Latin America, ECLAC and OECD, Development Centre Studies, 1998, pp. 111-146. [ Links ]

Baxter, M. and A.C. Stockman, "Business Cycles and the Exchange-Rate Regime. Some International Evidence", Journal of Monetary Economics, 23, 1989, pp. 377-400. [ Links ]

Bosworth, B., "Stabilization Policy in Emerging Markets: How Different is it?", presented at the conference Pros and Cons of Countercyclical Macroeconomic Policy, Council on Foreign Relations, July 2002. [ Links ]

Calvo, G.A. and F.S. Mishkin, "The Mirage of Exchange Rate Regimes for Emerging Market Countries", NBER Working Paper 9808, June 2003. [ Links ]

Calvo, G.A. and C.M. Reinhart, "Fear of Floating", The Quarterly Journal of Economics, 117 (2), 2002, pp. 379-408. [ Links ]

CEPAL, La inversión extranjera en América Latina y el Caribe, Naciones Unidas, mayo, 2002. [ Links ]

Devereux, M.B. and P.R. Lane, "Exchange Rates and Monetary Policy in Emerging Market Economies", working paper, April 2003. [ Links ]

Duarte, M., "Why don’t Macroeconomic Quantities Respond to Exchange Rate Variability?", Journal of Monetary Economics, 50, 2003, pp. 889-913. [ Links ]

Eatwell, J. and L. Taylor, "Introduction", in Eatwell and Taylor (eds.), International Capital Markets. Systems in Transition, Oxford University Press, 2002, pp. 1-14. [ Links ]

Eichengreen, B. and R. Hausmann, "Exchange Rates and Financial Fragility", NBER Working Paper 7418, 1999. [ Links ]

Flood, R.P. and A.K. Rose, "Fixing Exchange Rates. A Virtual Quest for Fundamentals", Journal of Monetary Economics, 36, 1995, pp. 3-37. [ Links ]

Ffrench-Davis, R. and G. Larraín, "How Optimal are the Extremes? Latin American Exchange Rate Policies During the Asian Crisis", WIDER Discussion Paper 2002(18), January 2002. [ Links ]

Ffrench-Davis, R. and J.A. Ocampo, "The Globalization of Financial Volatility: Challenges for Emerging Economies", in Ffrench-Davis, R. (ed.), Financial Crises in "Successful" Emerging Economies, UN ECLAC/ Brookings Institution Press, 2001, pp. 1-37. [ Links ]

Furman, J. and J.E. Stiglitz, "Economic Crises: Evidence and Insights from East Asia", Brookings Papers on Economic Activity, 2, 1998, pp. 1-135. [ Links ]

Galindo, A. and A. Izquierdo, "Sudden Stops and Exchange Rate Strategies in Latin America", Inter-American Development Bank ,Working Paper 484, February 2003. [ Links ]

Gavin, M., R. Hausmann and L. Leiderman, "The Macreconomics of Capital Flows to Latin America: Experience and Policy Issues", in Hausmann, R. and L. Rojas-Suárez (eds.) Volatile capital Flows. Taming their Impact on Latin America, Inter-American Development Bank, 1996, pp. 1-40. [ Links ]

Gosh, A.R., A.M. Gulde and H.C. Wolf, Exchange Rate Regimes. Choices and Consequences, MIT Press, 2002. [ Links ]

Greene, J.E., "The Output Decline in Asian Crisis Countries: Investment Aspects", IMF Working Paper 02/25, February 2002. [ Links ]

Griffith-Jones, S., M.F. Montes and A. Nasution, (eds.), Short-term Capital Flows and Economic Crises, UNU/WIDER Studies in Development Economics, Oxford University Press, 2001. [ Links ]

Gupta, P., D. Mishra and R. Sahay, "Output Response to Currency Crises", manuscript, November 2001. [ Links ]

Hausmann, R., M. Gavin et al., "Hacia una economía menos volátil", in Banco Interamericano de Desarrollo, Progreso Económico y Social en América Latina. Informe 1995, 1995, pp. 195-266. [ Links ]

Ibarra, C.A., "Slow Growth, Trade Liberalisation and the Mexican Disease: a Medium-term Macroeconomic Model with an Application to Mexico", International Review of Applied Economics, 17 (3), 2003, pp. 269-292. [ Links ]

Ito, T. and A. O. Krueger, "Introduction", in Ito and Krueger (eds.) Regional and Global Capital Flows. Macroeconomic Causes and Consequences, NBER-East Asia Seminar on Economics, vol. 10, The University of Chicago Press, 2001, pp. 1-10. [ Links ]

Iwata, S. and E. Tanner, "Pick your Poison: The Exchange Rate Regime and Capital Account Volatility in Emerging Markets", IMF Working Paper 03/92, 2003. [ Links ]

Jansen, W.J., "What do Capital Inflows do? Dissecting the Transmission Mechanism for Thailand, 1980-1996", Journal of Macroeconomics, 25, 2003, pp. 457-480. [ Links ]

Levy-Yeyati, E., U. Paniza and E. Stein, "The Cyclical Nature of North-South FDI Flows", manuscript, September 2002. [ Links ]

Levy-Yeyati, E. and F. Sturzenegger, "To Float or to Trail: Evidence on the Impact of Exchange Rate Regimes", manuscript, January 2001. [ Links ]

Mattar, J., J.C. Moreno-Brid and W. Peres, "Foreign Investment in Mexico After Economic Reform", ECLAC Estudios y Perspectivas, 10, July 2002. [ Links ]

Montiel, P. and C.M. Reinhart, "The Dynamics of Capital Movements to Emerging Economies During the 1990s", in Griffith-Jones, S., M.F. Montes and A. Nasution (eds.), 2001, pp. 3-28. [ Links ]

Ocampo, J.A., "Developing Countries’ Anti-cyclical Policies in a Globalized World", ECLAC United Nations, Temas de Coyuntura Series 13, November 2000. [ Links ]

Ocampo, J.A. and C. Tovar, "Capital Flows, Savings and Investment in Colombia, 1990-1996", in Ffrench-Davis and Reisen (eds.), 1998, pp. 147-192. [ Links ]

Prasad, E., K. Rogoff, S.J. Wei and M.A. Kose, "Effects of Financial Globalization on Developing Countries: Some Empirical Evidence", International Monetary Fund, March 2003. [ Links ]

Rodrik, D., "¿Por qué hay tanta inseguridad económica en América Latina?", Revista de la CEPAL, 73, abril, 2001, pp. 7-31. [ Links ]

Ros, J. and C. Bouillon, "Mexico: Trade Liberalization, Growth, Inequality and Poverty", in R. Vos, L. Taylor and R. Paes de Barros (eds.) Economic Liberalization, Distribution and Poverty, UNDP, Edward Elgar, 2002, pp. 347-389. [ Links ]

Trigueros, I., "Capital Inflows and Investment Performance: Mexico", in Ffrench-Davis and Reisen (eds.), Capital Flows and Investment Performance. Lessons from Latin America , ECLAC and OECD Development Centre Studies, 1998, pp. 193-214. [ Links ]

Received: November 2003; Accepted: April 2004

Creative Commons License This is an open-access article distributed under the terms of the Creative Commons Attribution License