Why is Inflation so Low after Large Devaluations?
AbstractThis paper studies the behavior of inflationnafter nine large post-1990 contractionary devaluations. A salient feature of the data is that inflation is low relative to the rate of devaluation. We argue that distribution costs and substitution away from imports to lower quality local goods can account quantitatively for the post-devaluation behavior of prices.
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Bibliographic InfoPaper provided by Institute of Economics, Hungarian Academy of Sciences in its series IEHAS Discussion Papers with number 0308.
Length: 56 pages
Date of creation: Jun 2003
Date of revision:
inflation; devaluation; exchange rates;
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
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