In their article, “Monetary Policy Strategies for Emerging Market Countries: Lessons from Latin America,” Mishkin and Stavasano (2002) document the ways in which Latin American countries have successfully stabilized their economies despite the challenges that are inherent in the initial phases of a country’s participation in the worldwide economic market. The authors document the specific challenges and explain how the economies of Latin American countries have resolved these challenges by selecting one of three economic policy and practice strategies: hard peg, monetary targeting, and inflation targeting.
Using case studies, the authors discussed here help delineate under what conditions emerging market countries should select and implement one of these strategies, and identify the respective benefits and potential pitfalls of each. While two countries, Argentina and Panama, have experimented with the hard peg system, they have continued to experience some instability.

Other countries in the region, including Brazil, Chile, Mexico, and Peru, have experimented with either monetary or inflation targeting, to varying degrees of success. I agree with the authors’ caveat that “one size does not fit all when it comes to designing monetary policy strategies” (p. 77). I also agree with their logical observation that the common factors required by any new monetary policy strategy and system are “[f]iscal discipline and a sound and well-regulated banking system” (p. 75); however, such conditions are easier to articulate than to achieve.

The questions the article raised include what political and social conditions are necessary to support the development and defense of fiscal discipline and a stable banking system. In countries where there is a culture of corruption and of extreme poverty, how difficult will it be to achieve the two conditions that Mishkin and Stavasano consider crucial? I also wonder what some of the long-term implications of some of the policy strategies—especially dollarization—are, and what role international monetary and regulatory agencies, such as the World Bank and IMF, play in the decisions that a country makes about its economic system.

It is rare that American readers gain a perspective into some of the finer elements of foreign countries’ economic systems; Rainish and Pushner (2002) perform a service in this regard by offering a concise overview of Latin American mutual funds. Learning about this element of other countries’ economies can not only help us understand international monetary dynamics, but can also help us understand broader political contexts. The article is particularly interesting because its focus is on Latin American mutual funds that are sold and distributed by fund managers who are inside the United States. The authors used a sample of 26 mutual funds and analyzed the performance of each over a longitudinal period of seven years by relying upon data retrieved from economic databases such as Morningstar.
Overall, one can conclude that the performance of all funds was mixed. The authors contend that the results suggest that analysts should consider the variable of risk assessment when evaluating both the potential and the actual performance of a mutual fund from this particular market sector, and state that when they adjusted their findings in this regard, 23% of the funds outperformed their counterparts in the home continent of Latin America.

In my opinion, this article can be quite misleading, not so much for what it includes as for what it excludes. Although the authors attempt to be both concise and comprehensive, they succeed at the former while falling short of the latter. There are many other variables that could potentially affect mutual fund performance, both domestically and internationally, but their focus is limited. Similarly, the comparison that the authors are attempting to make may be unfair. What factors affect mutual fund performance in the home country? What is the history of mutual funds in Latin America compared to the United States? There is a great deal of information left out of this brief article that could help contextualize its content and enhance the reader’s understanding.