The Modus Operandi of New Consensus Macroeconomics in Brazil, Chile and Mexico

Aída García Lázaro, Ignacio Perrotini

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9 Citations (SciVal)


This text provides a critical analysis of the experiences of Brazil, Chile and Mexico, countries that have adopted the inflationary targeting monetary policy espoused by New Consensus Macroeconomics (NCM). Using cointegration and error correction models, as well as a discussion of the major facts of the case, we contrast the NCM with the empirical evidence available. One essential feature of its modus operandi in these economies lies in the fact that inflation control is crucially dependent on the appreciation of the exchange rate. The essential hypothesis of the NCM cannot be accepted. Similarly, its monetary policy, in which inflation depends on the product gap, contradicts the export-led growth model adopted by these countries and is a recessive method of stabilizing prices.

Original languageEnglish
JournalProblemas del Desarrollo
Issue number179
Publication statusPublished - 2014

Bibliographical note

Publisher Copyright:
©2014, D.R. Universidad Nacional Autónoma de México (UNAM).


  • Central bank
  • Exchange rate
  • Inflation
  • International reserves
  • Monetary policy

ASJC Scopus subject areas

  • Development
  • Economics and Econometrics


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