THE PAKISTAN DEVELOPMENT REVIEW
Rolf J. Langhammer and Lúcio Vinhas de Souza (eds). Monetary Policy and Macroeconomic Stabilization in Latin America. Heidelberg: Springer-Verlag. 2005. ix+254 pages. Hardback. Price not given.
Monetary Policy plays a crucial role in macroeconomic stabilisation of a country. Latin American countries have faced successive waves of economic instability causing hyper-inflation and currency and financial crises leading to losses in output. This book is a collection of papers presented at the conference on “Monetary Policy and Macroeconomic Stabilization in Latin America”, held at the Kiel Institute for World Economics (IFW), in Kiel, Germany, on September 11-12, 2003. Well-known speakers from major multilateral policy institutions and the monetary authorities of Latin American economies participated in this conference. Graphs and tables throughout the book make for easy understanding of the main findings, as the book focuses on the recent experience of Latin American economies with designing, announcing, and implementing monetary policies with different internal and external anchors. It deals with the exposure of real exogenous shocks, high dollarisation, regulated and segmented labour market, inappropriate policies and monetary institutions, and unrest from deep financial and currency crises. The book draws lessons from European monetary integration for Latin America, and examines the role of financial integration to help reduce the systematic shocks in Latin America.