Economics in Latin America session at 12th International Conference

5. The degree of
conviction on
expected future
changes of short-term
interest
determine the size of
the difference
between D and H.
demand for securities with short
duration relative to horizon
(D – H)
Expected change in the interest rate
The degree of conviction on
expected future changes of short-term
interest determine the size of
the difference between D and H.
demand securities
with short duration
relative to horizon
(D – H)
Expected
change in
interest rates
Restating the speculative demand for
money in terms of duration

7. -20%
3.00
3.50
4.00
4.50
5.00
40%
5.50
6.00
6.50
7.00
7.50
100%
8.00
0%
20%
60%
80%
6/1/00
12/1/00
6/1/01
12/1/01
6/1/02
12/1/02
6/1/03
12/1/03
6/1/04
12/1/04
6/1/05
12/1/05
6/1/06
12/1/06
6/1/07
12/1/07
6/1/08
12/1/08
6/1/09
12/1/09
6/1/10
12/1/10
6/1/11
12/1/11
6/1/12
12/1/12
6/1/13
12/1/13
6/1/14
PIMCO Total Return Fund: Historical Maturity Breakdown and Dura on
0-1 YRS 1-3 YRS 3-5 YRS 5-10 YRS 10-20 YRS 20+ YRS Dura on (in years)

21. • Much of the policy discussion has been misplaced. They ignore the historical role NDBs play to
foster development at different stages of economic growth.

24. Caplen 2011

37. 0%
40%
45%
15%
50%
25%
55%
60%
40%
65%
5%
10%
20%
30%
35%
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Deposit money banks asset composition
Treasury securities Reserves Foreign Assets Claim on the private sector (RHS)