Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/51485 
Year of Publication: 
2006
Series/Report no.: 
Working Paper No. 575
Publisher: 
Inter-American Development Bank, Research Department, Washington, DC
Abstract: 
We use a panel dataset on industrial employment and trade for 9 Latin American countries for which liability dollarization data at the industrial level is available. We test 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.
Subjects: 
Manufacturing employment
Real exchange rates
Debt composition
Balance sheet effects
JEL: 
E24
F31
F34
G32
Document Type: 
Working Paper

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