The Balance of Payments Offset to Monetary Policy: Monetarist, Portfolio Balance, and Keynesian Estimates for Mexico and Venezuela

Deskripsi

investigates the extent to which monetary policy retains independence under fixed exchange rates by estimating the balance of payments offset coefficient—the degree to which changes in domestic credit are neutralized by reserve flows. The study compares three theoretical frameworks: the monetarist model (assuming perfect capital mobility and asset substitutability), the portfolio balance model (focusing on asset market equilibrium), and a Keynesian model (incorporating current and capital account dynamics).