Why Are Rates of Inflation So Low After Large Devaluations?

Ariel Tomas Burstein, Martin Eichenbaum () and Sergio Rebelo ()

No 8748, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies the behavior of inflation after nine large post-1990 contractionary devaluations. A salient feature of the data is that inflation is low relative to the rate of devaluation. We argue that distribution costs and substitution away from imports to lower quality local goods can account quantitatively for the post-devaluation behavior of prices.

JEL-codes: F31 (search for similar items in EconPapers)
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Date: 2002-01
Note: EFG IFM ME
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Working Paper: Why Are Rates of Inflation So Low After large Devaluations (2002)
Working Paper: Why Are Rates of Inflation So Low After Large Devaluations? (2002)
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