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Competing Monies in Guatemala: What Should We Expect?
| Content Provider | Semantic Scholar |
|---|---|
| Author | Castañeda, Juan Carlos Arellano |
| Copyright Year | 2002 |
| Abstract | On December 2000, the National Congress of Guatemala enacted a bill named Ley de Libre Negociacion de Divisas, which makes it legal to trade in any foreign currency, eliminates the legal tender feature of the quetzal (the Guatemalan national currency), and allows the domestic banking sector to engage in Þnancial intermediation operations denominated in any foreign currency. This law will be effective on May 1, 2001. This paper develops a model intended to analyze the effects of the new law on the Guatemalan economy. In particular, a dynamic, perfect-foresight, general equilibrium model of a small-open economy with imperfect capital mobility is solved. The change in the legal regime is modeled as a change in some preference parameters. The model shows that, in the most plausible scenario, we should not expect to observe very important macroeconomic or foreing-exchange effects at the time when the new law becomes effective. |
| Starting Page | 209 |
| Ending Page | 240 |
| Page Count | 32 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.lacea.org/meeting2001/CastanedaJ.pdf |
| Alternate Webpage(s) | http://www.cemla.org/red/papers2001/GU_Juan_Carlos_Castaneda.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
