Trade Reforms of Uncertain Duration and Real Uncertainty: A First Approximation

Guillermo Calvo and Enrique Mendoza

IMF Staff Papers, 1994, vol. 41, issue 4, 555-586

Abstract: This paper examines trade reforms of uncertain duration in economies affected by real shocks. These reforms induce consumption booms regardless of their duration and of the degree of intertemporal substitution. A recession may follow the boom, depending on the outcome of the reform and on whether government transfers offset wealth effects of tariffs. Observed booms in reforming economies are a noisy indicator of credibility because they reflect both policy uncertainty and real shocks, and the credibility component is determined in part by the properties of real shocks. Lack of credibility produces generally smaller fluctuations than those induced by real disturbances.

JEL-codes: E61 F13 F41 (search for similar items in EconPapers)
Date: 1994
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.jstor.org/stable/3867520?origin=pubexport main text (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Trade Reforms of Uncertain Duration and Real Uncertainty: A First Approximation (1994)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:imfstp:v:41:y:1994:i:4:p:555-586

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

Access Statistics for this article

More articles in IMF Staff Papers from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().