Title: Exchange rate-based stabilization. Pleasant monetary dynamics?
Abstract: High inflation economies have ultimately been successful in stabilising their prices using the exchange rate as a nominal anchor. Besides stabilization, these recent examples have shown boom-recession cycles, contrary to what can be expected from (pure) money-based stabilizations. Various theoretical explanations of such boom-cycles are discussed and a model of aggregate supply and demand generating such an outcome is developed. There the boom dynamics depend mainly on a slump in real interest rates and wage flexibility. (author's abstract)
Publication Year: 1997
Publication Date: 1997-08-01
Language: en
Type: preprint
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Cited By Count: 39
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