Macroeconomic Implications of Real Exchange Rate Targeting in Developing Countries
AbstractThe macroeconomic effects of a variety of exogenous and policy-induced real disturbances are examined under the assumption that the authorities target the level of the real exchange rate. We first discuss the implications--particularly for inflation and the current account--of targeting the rate at an "overdepreciated" level, and then examine the dynamic response of both output and inflation to a number of shocks. Further applications of the model to fiscal explanations of inflation, high-inflation plateaus, and money-based stabilization programs are also considered.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Staff Papers - International Monetary Fund.
Volume (Year): 38 (1991)
Issue (Month): 4 (December)
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Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Other versions of this item:
- Peter Montiel & Jonathan David Ostry, 1991. "Macroeconomic Implications of Real Exchange Rate Targeting in Developing Countries," IMF Working Papers 91/29, International Monetary Fund.
- F30 - International Economics - - International Finance - - - General
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
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