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Exchange-Rate Based Stabilisation under Imperfect Credibility

In: Open-Economy Macroeconomics


  • Guillermo A. Calvo

    (International Monetary Fund)

  • Carlos A. Végh

    (International Monetary Fund)


In the late 1970s, the Southern-Cone countries comprising Argentina, Chile and Uruguay launched stabilisation programmes based on a pre-announced path for the exchange rate that exhibited a declining rate of devaluation — the Tablitas.2 Policymakers expected a stabilisation plan based on the exchange rate as the nominal anchor to act directly on inflationary expectations — which were viewed as a central determinant of short-run inflation — thus increasing the chances of lowering inflation at no significant real cost.

Suggested Citation

  • Guillermo A. Calvo & Carlos A. Végh, 1993. "Exchange-Rate Based Stabilisation under Imperfect Credibility," International Economic Association Series, in: Helmut Frisch & Andreas Wörgötter (ed.), Open-Economy Macroeconomics, chapter 1, pages 3-28, Palgrave Macmillan.
  • Handle: RePEc:pal:intecp:978-1-349-12884-6_1
    DOI: 10.1007/978-1-349-12884-6_1

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