El Tipo de Cambio Real y la Experiencia de los Países del Cono Sur 1974-1982

Abstract

This paper studies the real exchange rate experience of the Southern cone countries during the late seventies and early eighties, and the explanations given to the sharp real appreciation of their currencies that generated a deep crisis in their traded goods industry. In the first section the facts regardind the exchange rate are described. The second shows the relationship between the real exchange rate and the relative prices in a small economy. The last four sections deal with the explanations to the determination of the non traded goods relative price. They are classified as PPP or neutral models, specific factors models, and sticky wages models. Future studies shall continue this line by testing the different hypothesis that have been raised to explain the real exchange rate determination.