Real Macroeconomic Stability and the Capital Account in Chile and Colombia

  • Ricardo Ffrench-Davis
  • Leonardo Villar


The management of real macroeconomic balances has shown to be a significant factor in explaining the growth performance and behavior of productive investment in emerging economies (EEs). The environment provided by macroeconomic policies to producers, including the “rightness” of macro-prices and the consistency between aggregate demand and potential GDP, have emerged as significant variables explaining the poor recent performance of LACs. Together with fiscal responsibility and prudential financial regulation, those variables conform a comprehensive set of real macroeconomic balances. In the present stage of globalization of financial volatility, capital flows have played, in emerging economies, a crucial role for the sustainability of those balances and their interplay with growth (Ffrench-Davis, 2005; Ocampo, 2005). Here we examine the macroeconomic policies implemented by Chile and Colombia since 1990, the successes and failures achieved, focusing in growth performance and macroeconomic sustainability.


Exchange Rate Foreign Direct Investment Monetary Policy Central Bank Real Exchange Rate 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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© Economic Commission for Latin America and the Caribbean 2006

Authors and Affiliations

  • Ricardo Ffrench-Davis
  • Leonardo Villar

There are no affiliations available

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