The 1987 Mexican Disinflation Program: An Exchange-Rate-Based Stabilization?
Summary:
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.
Series:
Working Paper No. 1996/024
Subject:
Business cycles Economic growth Exchange rate arrangements Exchange rates Foreign exchange Inflation Monetary policy Nominal anchors Prices
English
Publication Date:
March 1, 1996
ISBN/ISSN:
9781451844092/1018-5941
Stock No:
WPIEA0241996
Pages:
52
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