The dynamics of exchange rates in emerging countries: a Post-Keynesian perspective for the cases of Brazil and Mexico between 2000 and 2017

  • Nathalie Tellez Marins UNICAMP
  • Daniela Magalhães Prates UNICAMP


In the post-Keynesian view, the exchange rate is considered a financial asset class subject to investment decisions of investors in a hierarchical and asymmetric international monetary and financial system. Based on this theoretical reference, this paper conducts a comparative case study of the exchange rates of Brazil and Mexico during the 2000s. The goal is to highlight the influence of institutional on the exchange rate dynamics. The study covers six phases of the international liquidity cycle, using the Exponentially Weighted Moving Average method and the Pearson coefficient. The results show that, although the exchange rates studied have a very similar co-movement, there are important differences regarding their volatility and the impact of the theoretical determinants.


Download data is not yet available.

Author Biography

Daniela Magalhães Prates, UNICAMP

Associate Lecturer at Instituto de Economia, UNICAMP and level 1 researcher at CNPq


Andrade, R. P., & Prates, D. M. (2013). Exchange rate dynamics in a peripheral monetary economy. Journal of Post Keynesian Economics, 35(3), 399–416.

B3 – Brasil Bolsa Balcão. (2019). Market data e Índices. São Paulo: B3 - Brasil, Bolsa Balcão. Disponível em

BCB – Banco Central do Brasil. (2019). Sistema gerenciador de séries temporais. Brasilia: Banco Central do Brasil. Disponível em

BIS – Bank for International Settlement (2015). Currency carry trades in Latin America. Basel, Switzerland. Disponível em

BIS – Bank for International Settlement (2007). Triennial Central Bank Survey - Foreign exchange and derivatives market activity in 2007. Disponível em:

BIS – Bank for International Settlement (2010). Triennial Central Bank Survey - Foreign exchange and derivatives market activity in 2010. Disponível em:

BIS – Bank for International Settlement (2013). Triennial Central Bank Survey - Foreign exchange and derivatives market activity in 2013. Disponível em:

BIS – Bank for International Settlement (2016). Triennial Central Bank Survey - Foreign exchange and derivatives market activity in 2016. Disponível em:

Bresser-Pereira, L. C. (2009). A tendência da taxa de câmbio à sobrevalirização. In Globalização e competição (pp. 119 – 140). Rio de Janeiro: Campus-Elsevier.

Bloomberg (2019). Bloomberg Terminal. New York: Bloomberg. Disponível em

BM – Banco de México. (2019). Estadísticas. Ciudad de México: Banco de México. Disponível em

Brooks, C., & Chong, J. (2001). The Cross-Currency Hedging Performance of Implied Versus Statistical Forecasting Models. Journal of Futures Markets, 21(11), 1043–1069.

Capraro, S. (2015). Política monetaria y salario mínimo en México: una visión crítica. In M. A. Mancera (Ed.), Del Salario Mínimo al Salario Digno (pp. 55–104). Ixtapaluca, Estado de México: Consejo Econômico y Social de la Ciudad de México. Disponível em

Carrasco, C. A., & Ferreiro, J. (2013). Inflation targeting in Mexico. Journal of Post Keynesian Economics, 35(3), 341–372.

CEPALSTAT. (2019). Bases de Datos y Publicaciones Estadísticas. Santiago do Chile: CEPAL (Comissão Econômica para América Latina e Caribe); ONU (Organização das Nações Unidas). Disponível em

CME Group - Chicago Mercantile Exchange. (2019). Data. Chicago: CME Group. Disponível em

Collier, D. (1993). The comparative method. In A. W. Finifter (Ed.), Political Science: The State of Discipline II (v. 2, pp. 105–120). Washington, DC: American Political Science Association.

Correa, E. (2014). Mexico’s Financial Reforms: Bank Credit Without a Single Currency. International Journal of Political Economy, 43(2), 47–60.

Coudert, V., & Gex, M. (2010). Contagion inside the credit default swaps market: The case of the GM and Ford crisis in 2005. Journal of International Financial Markets, Institutions and Money, 20(2), 109–134.

Farhi, M. (2017). Foreign exchange derivatives and financial fragility in Brazil. In P. Arestis, C. Baltar, & D. Prates (Eds.), The Brazilian Economy since the Great Financial Crisis of 2007/2008 (pp. 307–335). Palgrave Macmillan, Cham.

FED - Federal Reserve System. (2019). Data. Washington, DC: Board of Governors of the Federal Reserve System. Disponível em

Ferreira, M. A., & Lopez, J. A. (2005). Evaluating interest rate covariance models within a value-at-risk framework. Journal of Financial Econometrics, 3(1), 126–168.

FMI, Fundo Monetário Internacional (2018) - Annual Report on Exchange Arrangements and Exchange Restrictions. International Monetary Fund. Monetary and Capital Markets Department. Disponível em:


Gallagher, K. P., & Prates, D. M. (2016). New Developmentalism versus the Financialization of the Resource Curse. In B. R. Schneider (Ed.), New Order and Progress (pp. 78–104). Oxford University Press.

George, A., & Bennett, A. (2005). Case Studies and Theory Development in the Social Sciences. Cambridge, Massachussets: MIT Press.

Harvey, J. T. (2008). Currencies, capital flows and crises: A post Keynesian analysis of exchange rate determination. Currencies, Capital Flows and Crises: A Post Keynesian Analysis of Exchange Rate Determination. London: Routledge.

He, D., & McCauley, R. N. (2012). Offshore Markets for the Domestic Currency: Monetary and Financial Stability Issues. SSRN Electronic Journal. Washington, DC.

IIF – International Institute of Finance. (2019). IIF Data and Indicators. Washington, DC: International Institute of Finance. Disponível em

IMF – International Monetary Fund. (2019). IMF data. Washington, DC: International Monetary Fund. Disponível em

Kaltenbrunner, A. (2015). A post Keynesian framework of exchange rate determination: a Minskyan approach. Journal of Post Keynesian Economics, 38(3), 426–448.

King, M. R. & Mallo, C. (2010). A user's guide to the Triennial Central Bank Survey of foreign exchange market activity. BIS Quarterly Review, December. Disponível em:

Kohlscheen, E. (2014). Long-run determinants of the brazilian real: A closer look at commodities. International Journal of Finance and Economics, 19(4), 239–250.

Mohanty, M., & Scatigna, M. (2005). Has globalisation reduced monetary policy independence? In Globalisation and monetary policy in emerging markets (n. 23, pp. 17–58). Basel, Switzerland: BIS papers.

OECD (2015). OECD Economic Surveys: Brazil 2015. Paris: OECD.

OECD. (2017). OECD Economic Surveys: Mexico 2017. Paris: OECD.

Prates, D. (2002). Crises financeiras dos países “emergentes”: uma interpretação heterodoxa. Tese de Doutorado – Universidade Estadual de Campinas Campinas. Disponível em

Prates, D. (2010). O regime cambial brasileiro de 1999 a 2008. Brasilia, DF: CEPAL. Disponível em

Prates, D. (2015). O regime de câmbio flutuante no Brasil : 1999 - 2012: especificidades e dilemas. Brasilia: IPEA. Disponível em regime de câmbio flutuante no Brasil_1999-2012.pdf

Ramos, R. (2016). Financialization and its Implications on the Determination of Exchange Rates of Emerging Market Economies. Tese de Doutorado, Universidade Estadual de Campinas e Université Paris 13. Disponível em

Ramos, R. M., & Prates, D. (2018). Heterodox Exchange Rate Theories: towards the consolidation of the different contributions and its presentation in the AB-SFC framework (unpublished).

Ros, J. (2015). Central Bank Policies in Mexico: Targets, instruments, and performance. Comparative Economic Studies, 57(3), 483–510.

Rossi, P. (2016). Taxa de câmbio e política cambial no Brasil: teoria, institucionalidade, papel da arbitragem e da especulação (1a ed.). Rio de Janeiro: Editora FGV.

Schulmeister, S. (1987). An Essay on Exchange Rate Dynamics (No. 0722-673X). Vienna: Wissenschaftszentrum.

Serrano, F. (2010). Juros, câmbio e o sistema de metas de inflação no Brasil. Revista de Economia Politica, 30(1), 63–72.

Sidaoui, J. (2005). Central banking intervention under a floating exchange rate regime: ten years of Mexican experience. In Foreign exchange market intervention in emerging markets: motives, techniques and implications (pp. 209–230). Basel, Switzerland: Bank for International Settlements. Disponível em

Tornell, A., Westermann, F., & Martínez, L. (2003). Liberalization, growth and financial crises: Lessons from Mexico and the developing world. Brookings Papers on Economic Activity, 2, 112. Disponível em

Ventura, A., & Garcia, M. (2012). Mercados futuro e à vista de câmbio no Brasil: O rabo abana o cachorro. Revista Brasileira de Economia, 66(1), 21–48.

How to Cite
Tellez Marins, N., & Magalhães Prates, D. (2020). The dynamics of exchange rates in emerging countries: a Post-Keynesian perspective for the cases of Brazil and Mexico between 2000 and 2017. Brazilian Keynesian Review, 5(2), 269-302.