Services on Demand
Journal
Article
Indicators
- Cited by SciELO
- Access statistics
Related links
- Cited by Google
- Similars in SciELO
- Similars in Google
Share
Cuadernos de Economía
Print version ISSN 0121-4772On-line version ISSN 2248-4337
Abstract
CASTRO FERNANDEZ, Juan Carlos. FRAGILIDAD FINANCIERA Y TASA DE CAMBIO. Cuad. Econ. [online]. 2011, vol.30, n.55, pp.155-177. ISSN 0121-4772.
A modification to the Foley (2003) model is presented here introducing the role of exchange rate and foreign currency denominated debt in order to determine their influence on financial fragility, using the financial instability hypothesis of Hyman Minsky under flexible exchange rate regime. Firms financial positions (hedge, speculative, and Ponzi) are affected by the movements of the exchange rate and of the interest rate. The model proves that nominal depreciation has real effects and may cause financial and economic crises, because a sudden depreciation causes a fall in profit and investment rates through credit cost and capital goods supply prices increase.
Keywords : financial crisis; post-keynesian macroeconomic models; exchange rate; private sector foreign debt.