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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:
Inflation
Real Wages
Terms Of Trade
Labour; Income Economics
Currency; Foreign Exchange
Economic Policy; Nternational Cooperation
Wages, Compensation, And Labor Costs: General
Deflation
Exports And Imports
International Economics
Labor
Foreign Exchange
Price Level
International Trade
Conventional Peg
Prices
Macroeconomics
Wages
Real Exchange Rates
Empirical Studies Of Trade
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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