Large Devaluations and the Real Exchange Rate

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

No 137, 2004 Meeting Papers from Society for Economic Dynamics

Abstract: This paper argues that the primary force behind the large fall in real exchange rates that occurs after large devaluations is the slow adjustment in the price of nontradable goods and services. Our empirical analysis is based on data from four large devaluation episodes: Mexico (1994), Korea (1997), Brazil (1999), and Argentina (2001). We conduct a more detailed analysis of the Argentina case using disaggregated CPI data, data from our own survey of prices in Buenos Aires, and scanner data from supermarkets. We then construct an open economy general equilibrium model that can account for the slow adjustment in nontradable good prices after a large devaluation

Keywords: Exchange rates; inflation (search for similar items in EconPapers)
JEL-codes: F41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-ifn
Date: 2004
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Related works:
Working Paper: Large Devaluations and the Real Exchange Rate (2004)
Working Paper: Large Devaluations and the Real Exchange Rate (2004)
Working Paper: Large Devaluations and the Real Exchange Rate (2004)
Journal Article: Large Devaluations and the Real Exchange Rate (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:red:sed004:137

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