Exchange rate based stablizations tales from Europe and Latin America by Alberto F. Ades

Cover of: Exchange rate based stablizations | Alberto F. Ades

Published by Country Economics Dept., World Bank,[ in Washington, DC (1818 H St., NW, Washington 20433) .

Written in English

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Places:

  • Europe.,
  • Latin America.

Subjects:

  • Foreign exchange rates -- Europe.,
  • Foreign exchange rates -- Latin America.,
  • Inflation (Finance) -- Europe.,
  • Inflation (Finance) -- Latin America.

Edition Notes

Book details

StatementAlberto F. Ades, Miguel A. Kiguel, Nissan Liviatan.
SeriesPolicy research working papers ;, WPS 1087
ContributionsKiguel, Miguel Alberto, 1954-, Liviatan, Nissan.
Classifications
LC ClassificationsHG3881.5.W57 P63 no. 1087
The Physical Object
Pagination39 p. :
Number of Pages39
ID Numbers
Open LibraryOL1505920M
LC Control Number93186382

Download Exchange rate based stablizations

I dentifying S tabilization E pisodes. The selection of the inflation stabilization episodes used in this study is based on the application of some rules to a data set of annual inflation rates for the period for a group of countries.

5 The alternative to a rules-based method for selecting episodes would be a comprehensive review of the history of those countries, aimed.

Dornbusch wrote a excellent book, this book is the best if you need to know about all the exchange rates theories and the relationship between Exchange Rates and Fiscal Policy. The book has chapters about Topics in Exchange Rates, Equilibrium Exchange Rates, Inflation and Stabilization and other topics.

Exchange-Rate Stabilization in the Exchange rate based stablizations book Negotiating the Tripartite Agreement (Princeton Studies in International Finance No. 41) Paperback – Author: Stephen V. Clarke. EXCHANGE-RATE-BASED STABILIZATION: A CRITICAL LOOK AT THE STYLIZED FACTS 15Notice that in the cases of inflation and money growth the charts show a transformation, X/(1+X), rather than the actual level of the variable in order to prevent the width of the associated confidence interval from obscuring the changes in the median.

An Exchange-Rate-Based Stabilization. by Santaella Julio A We examine whether Mexico's disinflation experience during fits a widely accepted set of stylized facts of exchange rate-based stabilization (ERBS), and relate it to theories put forward to account for the boom-recession business cycle associated with ERBS.

Abstract. In the late s, 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 Cited by: COVID Resources. Reliable information about the coronavirus (COVID) is available from the World Health Organization (current situation, international travel).Numerous and frequently-updated resource results are available from this ’s WebJunction has pulled together information and resources to assist library staff as they consider how to handle.

Abstract. In the context of a perfect foresight, intertemporal optimizing, cash-in-advance model, this paper studies the dynamics Exchange rate based stablizations book an inconsistent exchange rate-based stabilization policy that fixes the exchange rate without an underlying fiscal adjustment to ensure that the exchange rate policy is sustainable in the long by: Downloadable (with restrictions).

To address this question, this paper identifies stabilization episodes using criteria that differ from those in previous empirical studies of exchange-rate-based stabilizations. We find that, while some differences can be detected between exchange-rate-based stabilizations and stabilizations where the exchange rate is not the anchor, the.

This paper investigates the effects on production, consumption, and welfare that result from a temporary exchange-rate-based (ERB) stabilization plan. The analysis is based on a dynamic optimizing.

Exchange-Rate-Based Stabilization; A Model of Financial Fragility Interactions between banks and open capital account are investigated as rationalizations for empirical regularities characterizing disinflation programs anchored by the exchange rate.

This paper compares the experience with exchange-rate–based stabilization (ERBS) of four Western European countries with that of high-inflation developing countries. Abstract Exchange-rate-based stabilization is designed to reduce inflation by using the exchange rate as the main nominal anchor.

This does not necessarily mean a fixed exchange rate. A crawling peg with a low rate of depreciation or a pre-announced gradual Cited by: 3. In response to high and chronic inflation, countries have adopted different stabilization policies.

However, the extent to which these stabilization programs were designed for political motives is not clear. Since exchange-rate-based stabilizations (ERBS) create an initial consumption boom followed by a contraction, whereas money-based stabilizations (MBS) generate a.

" Exchange-Rate-Based Stabilization: A Critical Look at the Stylized Facts," IMF Staff Papers, Palgrave Macmillan, vol. 48(1), pages A. J Hamann, " Exchange-Rate-Based Stabilization; A Critical Look at the Stylized Facts," IMF Working Papers 99/, International Monetary Fund.

Sergio Rebelo & Carlos A. Vegh, Exchange rate-based stabilization plans are based on purchasing power parity: P, = eP', (2) where e is the exchange rate and P and P* stand for domestic and foreign prices, respectively. By fixing or managing the exchange rate (e), policy makers hope to map the evolution of the domestic inflation rate by pegging it to the inflation rate by: Exchange-rate-based stabilization is designed to reduce inflation by using the exchange rate as the main nominal anchor.

This does not necessarily mean a fixed exchange rate. NBER Program(s):Economic Fluctuations and Growth, International Finance and Macroeconomics. This paper uses a unified analytical framework to assess, both qualitatively and quantitatively, the relevance of the different hypotheses that have been proposed to explain the real effects of exchange rate-based by: Global Imbalances, Exchange Rates and Stabilization Policy [Makin, A.] on *FREE* shipping on qualifying offers.

Global Imbalances, Exchange Rates and Stabilization Author: A. Makin. The paper will identify conditions that make exchange rate-based stabilization successful and those that lead to its failure. It will also demonstrate that while the income effect can be instrumental in describing consumption booms associated with exchange rate-based stabilizations, the popular view based on the credibility hypothesis fails to Cited by: The International Monetary Fund (IMF) presents the full text of an article entitled "Exchange-Rate-Based Stabilization: A Model of Financial Fragility," by Yuri V.

Sobolev and published June The article discusses the interactions between banks and open capital account. This paper analyzes stabilization policy under predetermined exchange rates in a cash-in-advance, staggered-prices model. Under full credibility, a reduction in the rate of devaluation results in an immediate and permanent reduction in the inflation rate, with no.

Are Exchange Rate-Based Stabilizations Expansionary: Theoretical Considerations and the Brazilian Case Article (PDF Available) January with 26 Reads How we measure 'reads'Author: Gert Wehinger.

If the currency exchange rate increases with respect to the currency of another country then it is called as favorable rate and vice versa.

Official and unofficial exchange rates. It is the predetermined exchange rate based on which an international transaction is carried out.

Abstract This paper studies the initial effects of exchange-rate-based stabilization programs within a dynamic general equilibrium model of a small open economy in which inflation acts as a tax on intermediate transactions and capital accumulation is subject to. Get this from a library.

Exchange-rate-based stabilization: a model of financial fragility. [Yuri Vladimirovich Sobolev; International Monetary Fund.

Policy Development and Review Department.] -- Annotation Interactions between banks and open capital account are investigated as rationalizations for empirical regularities characterizing disinflation programs anchored by the exchange rate.

This paper studies the dynamics of inconsistent exchange rate-based stabilization policy —a policy that fixes the exchange rate without an underlying fiscal adjustment to ensure that the exchange rate policy is sustainable in the long run—in a model where the perception that exchange rate policy temporarily leads to an initial expansion in consumption that generates Cited by: The literature on the exchange-rate-based stabilization has focused almost exclusively in Latin America.

Many other countries however, such as Egypt. If the fiscal authority is impatient, a money-based stabilization provides more fiscal discipline and higher welfare for the representative agent than does an exchange rate-based stabilization.

Data for Latin American stabilizations in the last quarter-century seem to confirm the notion that stabilizing by using money rather than the exchange Cited by: Annotation This paper examines the behavior of private sector credit in chronic inflation countries that undergo exchange rate-based inflation stabilizations.

It concludes that these programs are characterized by a strong increase in private sector credit, both in absolute terms and as a fraction of real economic activity.

Stabilization Policy in an Exchange Rate Union Transmission, Coordination and Influence on the Union Cohesion.

Authors Based on this the consequences for union cohesion and the scope for policy coordination are discussed. Since the analytical framework is defined by a three country model many results from the traditional policy coordination. In exchange rate-based stabilization programs, credibility often follows a distinct time pattern.

At first it rises as the highly visible nominal anchor provides a sense of stability and hopes run high for a permanent solution to the fiscal problems. Downloadable. We examine whether Mexico’s disinflation experience during 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. This book analyzes key international monetary issues from a macro-foundations perspective. It proposes novel frameworks to interpret macroeconomic and financial linkages for globally integrated economies, examining global imbalances, exchange rates, interest rates, international capital flows, inflation, foreign and public debt.

The model predicts the typical boom-recession cycle associated with exchange- rate-based stabilization programs: the expansionary phase of the cycle is charac- terized by a boom in aggregate spending, persistent inflation, real exchange rate M.

Uribe/Journal of Monetary Economics 39 () appreciation, trade balance deterioration Cited by: There is a large literature that studies the macroeconomic impact of exchange-rate-based stabilizations.

This literature has made substantial progress in explaining the behavior of consumption, investment, and the current account during stabilizations (see Calvo and Végh () for a recent survey).Cited by:   Exchange Stabilization Fund - ESF: Money available to the U.S. Treasury Department primarily used for participating in the foreign-exchange market in an attempt to maintain currency stability.

developing countries emerging from debilitating wars, exchange rate-based stabilization would hold special appeal stemming from the need to rebuild and rehabilitate and expand economic activity quickly. In fact, exchange rate-based stabilization was the program of choice of the Lebanese government after the end of its civil war in the early s.

These so-called exchange rate-based stabilization (ERBS) plans have been associated with two empirical regularities. 1 First, they generate a boom–recession cycle in economic activity. Consumption and output expand in the early stages of the programs, but recessions occur at the later stages of failed and successful stabilizations alike.

Real Exchange Rates and Inflation in Exchange-Rate Based Stabilizations: An Empirical Examination. International Finance Discussion Paper No. Board of Governors of the Federal Reserve System. Comment on P. J. K. Kouri, “The Exchange Rate and the Balance of Payments in The Short Run and in The Long Run: A Monetary Approach” Alexander K.

Swoboda Pages Exchange rate-based stabilization (ERBS) Although hyperinflations were usually stopped very quickly and with minor output costs when the exchange rate was used as the nominal anchor (see Sargent, ), the same has not happened when dealing with chronic usually takes longer, or the stabilization fails completely with inflation coming back `with a .Abstract: An extensive literature has studied exchange rate-based inflation stabilization (ERBS) in chronic, high inflation countries (mainly in Latin America).

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