Are Exchange Rate-Based Stabilizations Expansionary: Theoretical Considerations and the Brazilian Case
AbstractHigh inflation economies, especially the Latin American cases like Argentina and Brazil, have ultimately been successful in stabilising their prices using the exchange rate as a nominal anchor. Contrary to conventional wisdom inflation in these cases has not been reduced at the cost of temporary recessions, instead, they have shown positive output effects. Various theoretical explanations of such boom-cycles are discussed and a model generating such an outcome is developed. Some empirical evidence is given by the Brazilian "Real Plan" of 1994. Nevertheless, the medium and long-term effects of such programmes can result in recessions and a resumption of high inflation, although the cases show that such "postponed stabilisation costs" can be overcome by adequate and flexible supply-side policies accompanying the stabilisation programme.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Vienna University of Economics, Department of Economics in its series Department of Economics Working Papers with number wuwp051.
Date of creation: Aug 1997
Date of revision:
Note: PDF Document
Contact details of provider:
Postal: Welthandelsplatz 1, 1020 Vienna, Austria
Web page: http://www.wu.ac.at/economics/en
Macroeconomic modelling; exchange rate-based stabilisation; high inflation; Brazil; Latin America;
Find related papers by JEL classification:
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Engelbert Stockhammer & Paul Ramskogler, 2008.
"Post Keynesian economics - how to move forward,"
Department of Economics Working Papers
wuwp124, Vienna University of Economics, Department of Economics.
- Engelbert Stockhammer & Paul Ramskogler, 2009. "Post-Keynesian economics How to move forward," European Journal of Economics and Economic Policies: Intervention, Edward Elgar, vol. 6(2), pages 227-246.
- Theresa Grafeneder-Weissteiner & Klaus Prettner, 2009.
"Agglomeration and population ageing in a two region model of exogenous growth,"
0901, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna.
- Theresa Grafeneder-Weissteiner & Klaus Prettner, 2009. "Agglomeration and population aging in a two region model of exogenous growth," Department of Economics Working Papers wuwp125, Vienna University of Economics, Department of Economics.
- Theresa Grafeneder-Weissteiner, 2010. "Demographic change, growth and agglomeration," Department of Economics Working Papers wuwp132, Vienna University of Economics, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Department of Economics).
If references are entirely missing, you can add them using this form.