Exchange-Rate Based Stabilisation under Imperfect Credibility

Guillermo Calvo and Carlos A. Végh
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Carlos A. Végh: International Monetary Fund

Chapter 1 in Open-Economy Macroeconomics, 1993, pp 3-28 from Palgrave Macmillan

Abstract: Abstract In the late 1970s, the Southern-Cone countries comprising Argentina, Chile and Uruguay launched stabilisation programmes based on a pre-announced path for the exchange rate that exhibited a declining rate of devaluation — the Tablitas.2 Policymakers expected a stabilisation plan based on the exchange rate as the nominal anchor to act directly on inflationary expectations — which were viewed as a central determinant of short-run inflation — thus increasing the chances of lowering inflation at no significant real cost.

Keywords: Exchange Rate; Interest Rate; Monetary Policy; International Monetary Fund; Inflation Rate (search for similar items in EconPapers)
Date: 1993
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Working Paper: Exchange-Rate-Based Stabilization under Imperfect Credibility (1991)
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DOI: 10.1007/978-1-349-12884-6_1

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