 The 1987 Mexican Disinflation Program: An Exchange-Rate-Based Stabilization?Julio Santaella and Abraham Vela No 1996/024, IMF Working Papers from International Monetary Fund Abstract: We examine whether Mexico’s disinflation experience during 1987-94 fits a widely accepted set of stylized facts of exchange rate-based stabilization (ERBS), and relate it to theories put forward to account for the boom-recession business cycle associated with ERBS. A cursory look at Mexican data shows that the experience fits quite closely the theoretical predictions and the stylized facts of ERBS. However, the paper shows that there were some important differences and peculiarities of the Mexican case that deserve further study, especially regarding the role of the nominal anchor and the nature of the business cycle. Keywords: WP; exchange rate-based-stabilization; price; inflation inertia; managed float; price shock; relative-price variability; durable goods; resource allocation; chronic-inflation economy; price level; inflation coefficient; twelve-month rate of inflation; Exchange rates; Inflation; Exchange rate arrangements; Business cycles; Nominal anchors (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1996/024 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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