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Macroeconomic Implications of Real Exchange Rate Targeting in Developing Countries

This paper analyzes the macroeconomic effects of a variety of exogenous and policy-induced real disturbances when the authorities target the level of the real exchange rate. It first discusses the implications--particularly for inflation and the current account--of targeting the rate at an “overdepr...

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Bibliographic Details
Main Author: Montiel, Peter
Other Authors: Ostry, Jonathan
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1991
Series:IMF Working Papers
Subjects:
Foreign Exchange
Labour
Real Wages
Currency
Macroeconomics
Deflation
Nternational Cooperation
Labor
International Trade
Inflation
Prices
Conventional Peg
Empirical Studies Of Trade
International Economics
Price Level
Real Exchange Rates
Income Economics
Exports And Imports
Economic Policy
Terms Of Trade
Wages, Compensation, And Labor Costs: General
Wages
Argentina
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper analyzes the macroeconomic effects of a variety of exogenous and policy-induced real disturbances when the authorities target the level of the real exchange rate. It first discusses the implications--particularly for inflation and the current account--of targeting the rate at an “overdepreciated” level. The paper then examines the dynamic response of both output and inflation to a number of shocks. Further applications of the model, particularly as regards fiscal explanations of inflation, high-inflation plateaus, and money-based stabilization programs, are also considered
Physical Description:49 pages
ISBN:9781451844702

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