Contractionary depreciations in Latin America during the 2000s

ABSTRACT This paper explores the effects of currency depreciations on output for main Latin American countries that have been using Inflation Targeting almost two decades. We construct VAR models Brazil, Chile, Colombia, Mexico and Peru last decades we find short-run contractionary in Brazil Mexico. illustrate some policy implications finding by building a simple model, show may destabilizing when monetary is conducted standard Taylor Rule.