Date of Degree
Alvin L. Marty
The main focus of this dissertation is to empirically test a number of assumptions of simple monetary models of the balance of payments using annual data on sixteen Latin American countries. The usual assumption of rapid price arbitrage is shown not to hold for most of these countries. Moreover, by using the technique developed by Granger, it is shown that the domestic rate of inflation is not an exogenous determinant of the respective official settlements balance of payments for most of these countries. Therefore, single equation models of the balance of payments which use the domestic rate of inflation as a regressor suffer from simultaneity bias. In addition, estimates of the demand for real cash balances per capita indicate a stable relationship for all countries.
Cassese, Anthony, "Money, the Dynamics of Inflation and the Balance of Payments in Latin America, 1947-1976" (1979). CUNY Academic Works.