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The 1987 Mexican Disinflation Program: An Exchange-rate-based Stabilization?


  • Julio A. Santaella

    () (Banco de México)

  • Abraham E. Vela

    (Banco de México)


We examine whether Mexico’s disinflation experience during 1987-94 fits the widely accepted set of stylized facts of exchange-ratebased stabilization (ERBS) on inflation, the boom-recession business cycle, and the external sector. A cursory look at Mexican data shows that the experience fits quite closely the stylized facts of ERBS. However, the paper shows that there were some important differences and peculiarities of the Mexican case that deserve further study, especially regarding the role of the nominal anchor and the nature of the business cycle.

Suggested Citation

  • Julio A. Santaella & Abraham E. Vela, 2005. "The 1987 Mexican Disinflation Program: An Exchange-rate-based Stabilization?," Economía Mexicana NUEVA ÉPOCA, , vol. 0(1), pages 5-40, January-J.
  • Handle: RePEc:emc:ecomex:v:14:y:2005:i:1:p:5-40

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    References listed on IDEAS

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    More about this item


    stabilization; disinflation; business cycle; nominal anchor;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies


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