Real Exchange Rates, Dollarization and Industrial Employment in Latin America

Arturo Galindo, Alejandro Izquierdo and José Manuel Montero

No 1943, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper uses a panel dataset on industrial employment and trade for 9 Latin American countries for which liability dollarization data at the industrial level is available. It tests whether real exchange rate fluctuations have a significant impact on employment, and analyze whether the impact varies with the degree of trade openness and liability dollarization. Econometric evidence supports the view that real exchange rate depreciations can impact employment growth positively, but this effect is reversed as liability dollarization increases. In industries with high liability dollarization, the overall impact of a real exchange rate depreciation can be negative.

Keywords: WP-575 (search for similar items in EconPapers)
Date: 2006-10
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Real exchange rates, dollarization and industrial employment in Latin America (2007)
Working Paper: Real exchange rates, dollarization and industrial employment in Latin America (2006)
Working Paper: Real Exchange Rates, Dollarization and Industrial Employment in Latin America (2006)
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