Inflation Exchange Rates And Stabilization

Author : Rudiger Dornbusch,National Bureau of Economic Research
Publisher : Unknown
Page : 24 pages
File Size : 40,9 Mb
Release : 1988
Category : Economic stabilization
ISBN : OCLC:220391599

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Inflation, Exchange Rates and Stabilization by Rudiger Dornbusch,National Bureau of Economic Research Pdf

The essay is an extended version of the Frank D. Graham Lecture presented at Princeton University in May 1985. It discusses the interaction of inflation and exchange rate policy in a variety of contexts. Four different settings are used to highlight that role: the experiments with exchange rate overvaluation in the Southern Cone; the place of exchange depreciation in the transition from high to even higher inflation discussed in the context of Brazil; exchange rate fixing and real appreciation during stabilization in the 1920s; and finally the U.S. real appreciation of 1980-85. The common thread of the argument is that exchange rate policy can make an important contribution to stabilization, but that it can also be lead to persistent deviations from PPP, with devastatingly adverse effects.The essay investigates through what channels these PPP deviatiins arise and how they influence inflation, trade and capital flight

Author : Mr.Guillermo Calvo,Mr.Carlos A. Végh Gramont
Publisher : International Monetary Fund
Page : 34 pages
File Size : 53,6 Mb
Release : 1991-08-01
Category : Business & Economics
ISBN : 9781451849912

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Exchange-Rate-Based Stabilization under Imperfect Credibility by Mr.Guillermo Calvo,Mr.Carlos A. Végh Gramont Pdf

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.

Author : Guillermo Calvo,Carlos A. Végh Gramont
Publisher : Unknown
Page : 86 pages
File Size : 45,8 Mb
Release : 1992
Category : Economic stabilization
ISBN : UCSD:31822015063159

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Inflation Stabilization and Nominal Anchors by Guillermo Calvo,Carlos A. Végh Gramont Pdf

Author : Mr.Guillermo Calvo,Mr.Carlos A. Végh Gramont
Publisher : International Monetary Fund
Page : 48 pages
File Size : 51,6 Mb
Release : 1990-11-01
Category : Business & Economics
ISBN : 9781451945584

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Credibility and the Dynamics of Stabilization Policy by Mr.Guillermo Calvo,Mr.Carlos A. Végh Gramont Pdf

This paper studies price stabilization policy under both predetermined and flexible exchange rates. Under predetermined exchange rates, a non-credible stabilization program results in an initial expansion of output, followed by a later recession. The initial expansion accompanies an appreciating real exchange rate. Under flexible exchange rates, the recession occurs at the beginning of the program. The real exchange rate appreciates sharply on impact but depreciates afterwards. Lack of credibility is more costly under predetermined exchange rates because the real effects are more pronounced.

Author : Rudiger Dornbusch
Publisher : MIT Press
Page : 490 pages
File Size : 53,5 Mb
Release : 1988
Category : Business & Economics
ISBN : 0262540606

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Exchange Rates and Inflation by Rudiger Dornbusch Pdf

Collected for the first time in Exchange Rates and Inflation, twenty-two articles are gathered in four parts covering exchange rate theory, special topics in exchange rate economics, equilibrium real exchange rates, and inflation and stabilization.

Author : Oya Celasun
Publisher : International Monetary Fund
Page : 35 pages
File Size : 45,5 Mb
Release : 2003-07-01
Category : Business & Economics
ISBN : 9781451857054

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Sticky Inflation and the Real Effects of Exchange Rate Based Stabilization by Oya Celasun Pdf

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.

Author : Jan Herin
Publisher : Routledge
Page : 280 pages
File Size : 49,5 Mb
Release : 2019-03-12
Category : Political Science
ISBN : 9780429708169

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Flexible Exchange Rates/h by Jan Herin Pdf

This book contains the papers, comments, and the discussion at a conference on "Flexible Exchange Rates and Stabilization Policy", held at Saltsjobaden, Stockholm, August 26–27, 1975. The papers integrate the flexible exchange rates theory with macro theory and stabilization policy analysis. .

Author : G.W Kolodko,Danuta Gotz-Kozierkiewicz,Elz. Skrzeszewska-Paczek
Publisher : Springer Science & Business Media
Page : 200 pages
File Size : 41,5 Mb
Release : 2012-12-06
Category : Business & Economics
ISBN : 9789401138949

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Hyperinflation and Stabilization in Postsocialist Economies by G.W Kolodko,Danuta Gotz-Kozierkiewicz,Elz. Skrzeszewska-Paczek Pdf

One would think states and peoples have had so many bad experiences with inflation that politicians at the helm of these states would do everything within their power to avoid inflation and, in particular, its very intensive shape, i. e. hyperinflation. However, this has not been the case. After the big inflations of the twenties and the post-war inflations of the fourties, we still witness intensive, economically, socially and politically extremely painful inflationary processes. And the eighties will be particularly engraved in history as a period in which the inflation has assumed an exceptionally dynamic character with respect to some countries. This regards, in the first place, Latin America, but not exclusively. Not without reason -as will be of particular intensity has also affected shown in this book -inflation countries which, according to the passed economic doctrine, were supposed to be completely immune from this economic illness. Most generally, the inflation can be assumed to be a uniform phenomenon which, in each case, can be described by a single, universal definition, while being divided into a number of forms and types distinguishable according to their original and secondary sources, their mechanisms, the ways of their manifestation as well as to their effects and the methods of counteracting them.

Author : World Institute for Development Economics Research
Publisher : MIT Press
Page : 452 pages
File Size : 53,7 Mb
Release : 1988
Category : Business & Economics
ISBN : 0262022796

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Inflation Stabilization by World Institute for Development Economics Research Pdf

Rampant inflation is a major economic problem in many of the less developed countries; two out of three attempts to stabilize these economies fail. Inflation Stabilization provides a valuable description and a critical analysis of the disinflation programs introduced in Argentina, Bolivia, Brazil, and Israel in 1985-86, and discusses the possibility of such a program in Mexico. It documents the initial steps in stabilization as well as the reasons for failure.As architects of the programs, several of the authors are in key positions to assess which aspects were critical in getting the programs accepted and where to look for difficulties and failures. In Israel, inflation was halted without recession. The challenge to policy makers today is in shifting from stabilization to the revival of sustained growth. This experience is described fully by Michael Bruno and Sylvia Piterman, who examine the critical issue of exchange rates, and by Alex Cukierman, who uses modeling to analyze the interaction of money, wages, prices, and activity under rational expectations that take the government's policy objectives into account.Endemic inflation and a sudden increase in external debt burden Argentina's economy, raising the wider issues of high inflation economies and stabilization that are discussed in the chapter by José Luis Machinea and that by Guido Di Tella and Alfredo Canavese.Eduardo Modiano and Mario Simonsen take up issues of wages in Brazil, particularly the problem of finding an equitable way to deal with a wage freeze; Simonsen develops an ambitious game theoretic rationalization of incomes policy as a coordinating device for imperfectly competitive economies. Bolivia did reach hyperinflation (price increases of more than 50 percent each month) before stabilizing. Juan Antonio Morales shows how stabilizing the exchange rate, in an economy where all pricing was already geared to the dollar, achieved stabilization without a wage or price freeze. And Francisco Gil Diaz asks whether an incomes-policy based program could work to control ever increasing inflation in Mexico.

Author : Mr.Vivek B. Arora,Mr.Manmohan S. Kumar
Publisher : International Monetary Fund
Page : 26 pages
File Size : 44,6 Mb
Release : 1994-11-01
Category : Business & Economics
ISBN : 9781451933819

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Trade Reform and Inflation Stabilization by Mr.Vivek B. Arora,Mr.Manmohan S. Kumar Pdf

This paper examines two important issues for a small high-inflation open economy with trade controls where the government implements an exchange-rate based stabilization program: first, the extent to which the degree of openness of the economy influences the probability of success of the program; and second, the conditions under which a trade reform, implemented in conjunction with the stabilization program, will increase the probability that stabilization will be successful. The paper shows that in an economy with high export and import price elasticities, structural reforms to increase openness can be important in determining the success of the program.

Author : Mr.Alberto Carrasquilla
Publisher : International Monetary Fund
Page : 40 pages
File Size : 41,7 Mb
Release : 1995-04-01
Category : Business & Economics
ISBN : 9781451846188

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Exchange Rate Bands and Shifts in the Stabilization Policy Regime by Mr.Alberto Carrasquilla Pdf

After 25 years, the Colombian authorities decided to abandon the crawling peg exchange rate policy and implement a regime of nominal exchange rate bands. Initial conditions in Colombia contrast sharply with those of other cases in which bands were part of an ongoing effort to reduce high inflation. This paper argues that the change in regime was motivated by a change in policy objectives. Starting from a policy whose rationale implied targeting stable inflation, a simple analytical model of optimal policy is presented; initial results with the new regime suggest that inflation is now considered costlier and that policy implementation has been consistent with this new view.

Author : Ms.Enrica Detragiache,Mr.A. Javier Hamann
Publisher : International Monetary Fund
Page : 30 pages
File Size : 42,8 Mb
Release : 1997-06-01
Category : Business & Economics
ISBN : 9781451849691

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Exchange Rate-Based Stabilization in Western Europe by Ms.Enrica Detragiache,Mr.A. Javier Hamann Pdf

This paper compares the experience with exchange-rate–based stabilization (ERBS) of four Western European countries with that of high-inflation developing countries. In general, the behavior of key macroeconomic variables—inflation, output, demand, the real exchange rate and the current account—in the four countries examined did not correspond to the pattern observed in developing countries, although some resemblance to this pattern could be found in Italy in 1987–92 and Greece in 1994–96. The experience with ERBS in Western Europe highlights the importance of incomes policy as an ingredient of a successful stabilization program and shows that the adoption of a looser anchor does not necessarily reduce the output cost of disinflation.

Author : Mr.Carlos A. Végh Gramont
Publisher : International Monetary Fund
Page : 72 pages
File Size : 42,5 Mb
Release : 1991-11-01
Category : Business & Economics
ISBN : 9781451946727

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Stopping High Inflation by Mr.Carlos A. Végh Gramont Pdf

The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.

Author : Gustavo Adler,Mr.Ruy Lama,Juan Pablo Medina Guzman
Publisher : International Monetary Fund
Page : 40 pages
File Size : 47,9 Mb
Release : 2016-03-17
Category : Business & Economics
ISBN : 9781475520415

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Foreign Exchange Intervention under Policy Uncertainty by Gustavo Adler,Mr.Ruy Lama,Juan Pablo Medina Guzman Pdf

We study the use of foreign exchange (FX) intervention as an additional policy instrument in an environment with learning, where agents infer the central bank policy rules from its policy actions. Under full information, a central bank focused on stabilizing output and inflation can achieve better outcomes by using FX intervention as an additional policy tool. Under policy uncertainty, where agents perceive that monetary policy may also have exchange rate stabilization goals, the use of FX intervention entails a trade-off, reducing output volatility while increasing inflation volatility. While having an additional policy tool is always beneficial, we find that the optimal magnitude of intervention is higher in monetary policy regimes with lower uncertainty. These results indicate that the benefits of using FX intervention as an additional stabilization tool are greater in regimes where monetary policy is credibly focused on output and inflation stabilization.

Author : Andres Solimano
Publisher : World Bank Publications
Page : 50 pages
File Size : 43,5 Mb
Release : 2024-06-02
Category : Electronic
ISBN : 8210379456XXX

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Inflation and the Costs of Stabilization by Andres Solimano Pdf