The Possible Trinity: Interest Rate, Exchange Rate, and Taxes on Optimal Capital Flows in an EGDE Model for a Small Open Economy

Working papers | 2015 | N 63

Authors

  • Guillermo Escudé Banco Central de la República Argentina

Keywords:

EGDE models, Small and open economy, Monetary and exchange rate policy, Capital controls, Optimal policies

Abstract

We study the interest rate spread of Argentine financial entities during the last eighteen years. We analyze the Granger causality of selected variables and estimate econometric models that relate the spread to macroeconomic and microeconomic factors. The results indicate that product growth and the monetization of the economy reduce the spread throughout the period; Country risk and prices, on the other hand, are significant only for subperiods, suggesting differences in the macroeconomic context. Banking market variables also have significant impacts, including: taxes, administrative expenses, irregular portfolio, use of own resources and liquidity.

JEL classification: E8, F9, O18

Portada documento de trabajo 63

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Published

2024-05-13

How to Cite

Escudé, G. (2024). The Possible Trinity: Interest Rate, Exchange Rate, and Taxes on Optimal Capital Flows in an EGDE Model for a Small Open Economy: Working papers | 2015 | N 63. Working papers. retrieved from https://bcra.ojs.theke.io/documentos_de_trabajo/article/view/274

Issue

2015

Section

Articles