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- Title
DISTRIBUTIVE EFFECTS OF BALANCE-OF-PAYMENTS CONSTRAINTS: A THEORETICAL AND EMPIRICAL ANALYSIS OF ARGENTINA (2004-2022).
- Authors
DVOSKIN, ARIEL; FELDMAN, GERMÁN DAVID; GAREGNANI, MARÍA LORENA
- Abstract
The paper studies the distributive effects of the external constraint in Argentina during the 2004-2022 period. We first develop a model inspired by the classical tradition -- exogenous distribution -- for a small (price taker) open economy with technical and financial dependencies under foreign exchange controls to examine the negative effects of exchange rate depreciations on real wage. Then, we use a Vector Error Correction Model (VECM): a) to show the long-run negative relationship between the real exchange rate and real wages in Argentina during the period under analysis; b) to identify the autonomous -- or weakly exogenous -- role played by the nominal exchange rate in the determination of income distribution; and, c) to capture the influence that, in the short-run, the financial exchange rate exerts on the official exchange rate.
- Subjects
ARGENTINA; INCOME distribution; FOREIGN exchange; FOREIGN exchange rates; REAL wages; FREE trade
- Publication
International Economics / Economia Internazionale, 2024, Vol 77, Issue 2, p233
- ISSN
0012-981X
- Publication type
Article