Exchange rate regimes and macroeconomic stabilization in a developing country

David H. Howard

No 314, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Argentina's Austral Plan is used as a point of departure for the investigation of the role of exchange rate policy in a macroeconomic stabilization program for a developing country. A model of a country like Argentina is developed and the relationship between the exchange rate and macroeconomic policy is derived. The paper next explores the implementing of alternative macroeconomic policy strategies involving exchange rates. The framework provides a rough way of quantifying and making operational what is meant by \"appropriate\" fiscal and monetary policy in the context of a stabilization program. Finally, some practical aspects of implementing an exchange-rate-oriented macroeconomic stabilization program are discussed.

Keywords: Foreign exchange rates; Macroeconomics; Developing countries (search for similar items in EconPapers)
Date: 1987
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:314

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