Post-Cepaline Reflections on Inflation and External Crisis

Abstract

The UN/ECLA 1949 Manifesto centered on inflation and balance of payments as critical issues on Latin America’s development. Fifty years afterwards, Latin America succeeded both conceptually and in practice to overcome the high inflation syndrome. Not so the external strangulation, which is still very much present in the region. After reviewing recent conceptual advances in understanding the “dollar constraint” problem, the paper discusses Persio Arida’s proposal for a fully convertible floating currency as a means of building a domestic long-term financial market.

JEL Classification: F32; F41; F43; O11; O54.