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Política fiscal, estabilización de precios y mercado incompletos

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  • Francisco Venegas Martínez

    (Tecnológico de Monterrey, Campus Ciudad de México)

Abstract

This paper develops a stochastic model of temporary stabilization of prices with the exchange rate acting as a nominal anchor of inflation. The model presents imperfect credibility, and explicitly recognizes the uncertainty in the dynamics of the exchange rate and in the expected behaviour of fiscal policy. It is assumed that a mixed diffusion-jump stochastic process drives the exchange rate. Also, the model supposes that the tax rate on wealth follows a geometric Brownian motion. Under this framework, it is assumed that a derivatives market to hedge against future devaluation does not exist, that is, financial markets are incomplete. Consumption and portfolio decisions of a representative consumer, in equilibrium, are examined when the stabilization plan is implemented and fiscal policy is uncertain. Finally, the effects of exogenous shocks in the exchange-rate policy and economic welfare are assessed.

Suggested Citation

  • Francisco Venegas Martínez, 2005. "Política fiscal, estabilización de precios y mercado incompletos," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 20(1), pages 3-25.
    • Handle: RePEc:emx:esteco:v:20:y:2005:i:1:p:3-25
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    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/170/172
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    Cited by:

    1. Francisco Venegas-Martínez, 2005. "Temporary Stabilization and the Real Option of Waiting when Consumption can be Delayed: an Extreme Value Approach," DEGIT Conference Papers c010_043, DEGIT, Dynamics, Economic Growth, and International Trade.

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