Exchange Rate Based Stabilazation
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Exchange Rate Based Stabilization Under Imperfect Credibility
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Author : Mr.Guillermo Calvo
language : en
Publisher: International Monetary Fund
Release Date : 1991-08-01
Exchange Rate Based Stabilization Under Imperfect Credibility written by Mr.Guillermo Calvo and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1991-08-01 with Business & Economics categories.
This paper analyzes stabilization policy under predetermined exchange rates in a cash-in-advance, staggered-prices model. Under full credibility, a reduction in the rate of devaluation results in an immediate and permanent reduction in the inflation rate, with no effect on output or consumption. In contrast, a non-credible stabilization results in an initial expansion of output, followed by a later recession. The inflation rate of home goods remains above the rate of devaluation throughout the program, thus resulting in a sustained real exchange rate appreciation.
Exchange Rate Based Stabilization
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Author : Mr.A. Javier Hamann
language : en
Publisher: International Monetary Fund
Release Date : 1999-10-01
Exchange Rate Based Stabilization written by Mr.A. Javier Hamann and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999-10-01 with Business & Economics categories.
Do exchange-rate-based stabilizations generate distinctive economic dynamics? To address this question, this paper identifies stabilization episodes using criteria that differ from those in previous empirical studies of exchange-rate-based stabilizations. We find that, while some differences can be detected between exchange-rate-based stabilizations and stabilizations where the exchange rate is not the anchor, the behavior of important variables does not appear to differ—especially output growth, which is good in both cases. There is also no evidence that fiscal discipline is enhanced by adopting an exchange-rate anchor, or that there are any systematic differences in the success records of stabilizations that use the exchange rate as a nominal anchor and those that do not.
The Business Cycle Associated With Exchange Rate Based Stabilization
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Author : Miguel Alberto Kiguel
language : en
Publisher: World Bank Publications
Release Date : 1990
The Business Cycle Associated With Exchange Rate Based Stabilization written by Miguel Alberto Kiguel and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1990 with Business cycles categories.
Disinflation programs in chronic inflation countries do not normally follow the usual Phillips curve tradeoff in the medium run. Instead of having a sharp recession in the early stage of stabilization, there often is an initial expansion of output followed by a recession and balance of payments difficulties. This pattern is related to programs that use the exchange rate as an instrument of disinflation.
Exchange Rate Uncertainty In Money Based Stabilization Programs
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Author : Mr.R. Armando Morales
language : en
Publisher: International Monetary Fund
Release Date : 1998-01-01
Exchange Rate Uncertainty In Money Based Stabilization Programs written by Mr.R. Armando Morales and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1998-01-01 with Business & Economics categories.
Complementing the explanation provided by Calvo and Vegh (1994) for money-based stabilization programs, exchange rate uncertainty introduced to a particular version of the portfolio approach with imperfect competition in the banking system leads to a bias toward appreciation that is directly related to the divergence of expectations and that dampens the interaction between portfolio movements and the real exchange rate. Based on Frankel-Froot, uncertainty exists when the fundamental equilibrium real exchange rate is temporarily unknown in a foreign exchange market with two types of agents: ‘parity-guessers,’ who expect a jump to a reference parity level, and ‘money-followers,’ who expect nominal depreciation equal to the monetary rule.
Sticky Inflation And The Real Effects Of Exchange Rate Based Stabilization
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Author : Oya Celasun
language : en
Publisher: International Monetary Fund
Release Date : 2003-07-01
Sticky Inflation And The Real Effects Of Exchange Rate Based Stabilization written by Oya Celasun and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003-07-01 with Business & Economics categories.
Exchange rate-based inflation stabilization (ERBS) policies are associated with a boom-recession cycle in economic activity and sustained real exchange rate appreciation. A class of models in the literature has explained these empirical regularities with the lack of credibility of the stabilization plans. The lack-of-credibility models typically assume perfectly forward-looking pricing behavior without inflation stickiness and attribute the slow decline in inflation to the consumption boom that occurs due to the perceived temporariness of the ERBS policy. This paper tests the empirical validity of forward-looking pricing behavior in Mexico and Turkey, two countries which have experienced ERBS. It finds that the forward- and backward-looking components of inflation weigh approximately equally in pricing behavior, and therefore, that inflation is partially sticky. The paper then develops the theoretical implications of partial inflation stickiness in a lack of credibility model of ERBS and concludes that the presence of stickiness significantly reduces the persistence of the consumption boom predicted by the model, but helps to explain the recession in the late phase of the stabilization.
Exchange Rate Based Stabilization In Argentina And Chile
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Author : Miguel Alberto Kiguel
language : en
Publisher: World Bank Publications
Release Date : 1994
Exchange Rate Based Stabilization In Argentina And Chile written by Miguel Alberto Kiguel and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with Economic stabilization categories.
Exchange- rate- based stabilization programs supported by a sustained fiscal adjustment generally reduced long- term inflation. Success was not easy, however, because rigid adherence to the exchange rate rule many times resulted in strong overvaluation of the currency and balance- of- payments problems before stabilization was finally secured.
Real Effects Of Exchange Rate Based Stabilization
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Author : Sergio Rebelo
language : en
Publisher:
Release Date : 1995
Real Effects Of Exchange Rate Based Stabilization written by Sergio Rebelo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1995 with Deflation (Finance) categories.
This paper uses a unified analytical framework to assess, both qualitatively and quantitatively, the relevance of the different hypotheses that have been proposed to explain the real effects of exchange rate-based stabilizations. The four major hypotheses analyzed are: (i) the supply-side effects associated with an inflation decline; (ii) the perception that the exchange rate peg is temporary; (iii) the fiscal adjustments that tend to accompany the peg; and (iv) the existence of nominal rigidities in wages or prices.
The Behavior Of Real Interest Rates In Exchange Rate Based Stabilization Programs
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Author : Pierre-Richard Agénor
language : en
Publisher: International Monetary Fund
Release Date : 1994-06-01
The Behavior Of Real Interest Rates In Exchange Rate Based Stabilization Programs written by Pierre-Richard Agénor and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994-06-01 with Business & Economics categories.
This paper examines the behavior of real interest rates in exchange-rate based stabilization programs. The analysis is based on a model with imperfect capital mobility and optimizing agents. A permanent reduction in the devaluation rate is first shown to have an ambiguous effect on real interest rates on impact. The analysis is then extended to consider a stabilization program characterized by an initial reduction in the rate of devaluation of the nominal exchange rate, and the announcement of a future increase in income taxes. The impact effect on real interest rates is shown to depend upon the degree of credibility of the announcement. Real interest rates may fall if agents do not believe that taxes will be raised, and rise if the future tax reform is sufficiently credible.
Inflation Stabilization And Nominal Anchors
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Author : Guillermo Calvo
language : en
Publisher:
Release Date : 1992
Inflation Stabilization And Nominal Anchors written by Guillermo Calvo and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1992 with Economic stabilization categories.
Essays On Exchange Rate Based Stabilization And Inflation Convergence
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Author : Piero S. Ghezzi
language : en
Publisher:
Release Date : 1997
Essays On Exchange Rate Based Stabilization And Inflation Convergence written by Piero S. Ghezzi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with categories.
