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Fifteen Years of Central Banking in Honduras

Published online by Cambridge University Press:  02 January 2018

Richard A. LaBarge  and
Frank Falero Jr.
Richard A. LaBarge
Affiliation:
Louisiana State University, New Orleans
Frank Falero Jr.
Affiliation:
Virginia Polytechnic Institute, Blacksburg
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Extract

The purpose of this paper is to draw together from primary sources the case history of formative policy years for the Central Bank of Honduras. This bank, like others formed throughout the underdeveloped world in the post-World War II era, was created in 1950 as a vehicle for stimulating economic growth. In retrospect over 186 months of operations this particular Central Bank has an unusually outstanding policy record—a record which argues forcefully for appropriate monetary policy as a stimulant to economic advance.

The first meeting of Central Bank directors was held on May 31, 1950, for the purpose of establishing the major monetary policies under which the Bank would commence operations July 1. At that meeting the directors established a schedule of maximum interest rates to be charged by the public commercial banks and a schedule of rates at which eligible commercial paper of 12 months maturity or less could be rediscounted with the Central Bank.

Type
Research Article
Information
Journal of Inter-American Studies , Volume 9 , Issue 4 , October 1967 , pp. 488 - 506
Copyright
Copyright © University of Miami 1967

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References

1 This paper is a revision of historical material contained in a longer statistical paper presented to the 36th Annual Meeting of the Southern Economic Association. The authors express appreciation to Lie. Guillermo Bueso and his staff at the Department of Economic Studies in the Central Bank of Honduras for their help in providing the documents and data necessary for completion of this study. The library of the University of Florida also was helpful in supplying research material at an early stage of the work. Acknowledgements notwithstanding, all responsibility for errors, omissions, and conclusions rests solely with the authors.

2 Banco Central de Honduras, Primera memoria del Banco Central de Honduras, junio 1950 a diciembre 1951 (Tegucigalpa: López y Cía., 1952), pp. 44–47.Google Scholar

3 Primera memoria …, p. 46.

4 Primera memoria …, pp. 5-8. The rates of growth and inflation cited in the text differ from the ones reported in the Primera memoria. The numbers given here are computed from the definitive social accounts done by Tosco, Manuel, et al., “Cuentas nacionales, 1925-1955” (Tegucigalpa: Banco Central de Honduras, mimeo., marzo de 1957).Google Scholar The Tosco figures are used in all Central Bank publications from 1957 forward.

5 Primera memoria . . ., pp. 64-65.

6 Banco Central de Honduras, Segunda memoria, 1952-1953 (Tegucigalpa, 1954), pp. 5–7, 10 and 56.Google Scholar See also the interim issue, Banco Central de Honduras, “Informe del Banco Central de Honduras, 1951-1952” (Tegucigalpa: mimeo., 1953), pp. 1-3 covering the first six months of 1952. For gross domestic product figures see Tosco, “Cuentas nacionales …”

7 Segunda memoria …, p. 33.

8 Segunda memoria . . ., pp. 6-13, 20-21, and 56. See Tosco for the gross domestic product data.

9 Segunda memoria …, p. 6.

10 Segunda memoria …, p. 6.

11 Memoria, 1954 …, pp. 3-5 and 20-23. See Tosco for the gross domestic product figures.

12 New rates appear in Memoria, 1954 …, pp. 33-34. Old rates appear in Primera memoria …, pp. 46-47.

13 Memoria, 1954 …, pp. 33-34.

14 Memoria, 1955-1956 …, pp. 28-32. The gross domestic product figures are based on Tosco, “Cuentas nacionales …” reaffirmed by Memoria, 1958 y 1959, …, pp. 45-48.

15 Memoria, 1955-1956 …, p. 49.

16 Memoria, 1955-1956 . . ., pp. 52-53 for new rates. For old rates see Memoria, 1954 …, pp. 33-34.

17 Memoria, 1958 y 1959 …, p. 66; Primera memoria …, p. 46.

18 Memoria, 1955-1956 …, p. 53.

19 Memoria, 1955-1956 …, pp. 54-55.

20 Memoria, 1955-1956 …, p. 26; Memoria, 1957 …, p. 21; and Memoria, 1958 y 1959 …, pp. 45-48.

21 Memoria, 1955-1956 …, pp. 84-91.

22 Memoria, 1955-1956 …, p. 91.

23 Memoria, 1955-1956 …, p. 91.

24 Memoria, 1957 …, p. 21; Memoria, 1958 y 1959, pp. 45-48 and 185.

25 Memoria, 1957 …, pp. 39-41 and 45-46.

26 Memoria, 1957 …, pp. 23 and 40-41; Memoria, 1958 y 1959 . . ., p. 29. The text on p. 40 of Memoria, 1957 contains printing errors regarding the new reserve levels which become apparent upon reading the related material cited.

27 Memoria, 1957 …, p. 41; old rates appear in Primera memoria …, p. 91.

28 Memoria, 1958 y 1959 . . ., pp. 7-9. The quotation cited appears on p. 7. It is clear from the remaining text that the Central Bank blamed the rise in unemployment on the high wage rates specified in the new labor contracts even though it found it difficult to say so in a forthright manner.

29 Memoria, 1958 y 1959 …, pp. 7, 17-23 and 185.

30 Memoria, 1958 y 1959 …, pp. 66 and 68-69.

31 Memoria, 1958 y 1959 …, pp. 29-30 and 67-68.

32 Memoria, 1958 y 1959 . . ., pp. 66-67, 183, and 214.

33 Memoria, 1958 y 1959 …, p. 184.

34 Memoria, 1958 y 1959 …, pp. 171, 182-185, and 212; for gross domestic product data, see Memoria, 1961 . . ., pp. 17-18.

35 Memoria, 1960 . . ., pp. 14-15, 131-132, and 158-159. For gross domestic product data, see Memoria, 1961 . . ., pp. 17-18.

36 Memoria, 1960 …, pp. 5-6, 18, and 159.

37 Memoria, 1961 …, pp. vii and xxxvii-xliii. For gross domestic product data, see Memoria, 1962 . . ., pp. 8 and 14.

38 Memoria, 1961 . . ., pp. viii, xxxviii-xl, and 2-3.

39 Memoria, 1962 …, p. 29.

40 Memoria, 1962 . . ., pp. 8, 14, 17, 23-26, 29-36, and 46.

41 Memoria, 1962 . . ., pp. 53-55.

42 Memoria, 1963 …, pp. 9-12, 18-34, 39, 57, 63 and 69-71. For gross domestic product data see Memoria, 1964 . . ., pp. 9, 17, and 55.

43 Memoria, 1964 …, pp. 9, 14, 17, 19-23, 37, 45, 53 and 55. For revised figures on trade and gross domestic product, see Revista Trimestral del Banco Central de Honduras, octubre-diciembre de 1965, pp. 39 and 57.

44 Memoria, 1964 …, p. 77.

45 Memoria, 1964 …, pp. 67 and 78-79.

46 Revista Trimestral del Banco Central de Honduras, octubre-diciembre de 1965, pp. iv, 39, 50-51, 57, and 60-61.

47 Revista Trimestral . . ., abril-junio de 1965, p. xi; Revista Trimestral …, octubre-diciembre de 1965, p. vi.