The Vulnerability of Inflation Stabilization to External Shocks: A Case Study of Bolivia

Juan Antonio Morales
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Juan Antonio Morales: Universidad Católica Boliviana

Chapter 8 in Economics in a Changing World, 1994, pp 171-194 from Palgrave Macmillan

Abstract: Abstract Numerous inflation stabilization programmes are based on exchange-rate stabilization. Under most circumstances the stock of net foreign reserves (NFR) plays a crucial role in the credibility and success of exchange-rate stabilization, as has been stressed by Dornbusch (1991). A rapid depletion of NFR caused by an exogenous shock may severely imperil an otherwise well-designed programme.

Keywords: Exchange Rate; Central Bank; Real Exchange Rate; Reserve Price; Money Demand (search for similar items in EconPapers)
Date: 1994
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DOI: 10.1007/978-1-349-23458-5_8

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