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Offsetting and Sterilization Mechanisms in Argentina (1992–2014)
Thomas, Carolyn | Cachanosky, Nicolás
Credit and Capital Markets – Kredit und Kapital, Vol. 49 (2016), Iss. 4 : pp. 515–534
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Carolyn Thomas, Metropolitan State University of Denver, Department of Economics, Campus Box 77, P.O. Box 173362, Denver, CO 80217.
Nicolás Cachanosky, Metropolitan State University of Denver, Department of Economics, Campus Box 77, P.O. Box 173362, Denver, CO 80217
Abstract
We test the existence and extent of capital flows as an offset to monetary policy in Argentina from 1992–2014. After providing an analysis of Argentina"s past and current economic conditions, a theoretical framework of the offset and sterilization mechanisms will be provided. Then, with the use of VAR and IRF analysis, it is shown that a one standard deviation shock to monetary policy (measured by changes in net domestic assets) is offset between 27 %–32 % by responsive capital flows (measured by changes in net foreign assets). Furthermore, the results indicate that the Argentine government more than sterilizes shocks to capital flows through compensation of expansionary monetary policy.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Carolyn Thomas / Nicolás Cachanosky: Offsetting and Sterilization Mechanisms in Argentina (1992–2014) | 1 |