| Description |
1 online resource (26 pages) |
| Series |
IMF Working Papers ; Working Paper No. 93/90 |
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IMF Working Papers ; Working Paper no. 93/90
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| Summary |
We study the effects of a credible, gradual exchange rate based disinflation program in a two sector economy. After an initial real exchange rate depreciation, the reductions in the rate of devaluation reduce the monetary wedge generated by a cash in advance constraint, leading to a gradual increase in absorption that yields progressive real exchange rate appreciations and current account deficits. An initial boom in economic activity is not followed by a later contraction, as labor supply expands during the whole length of the program |
| Notes |
Available in PDF, ePUB, and Mobi formats on the Internet |
| Form |
Electronic book
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| Author |
International Monetary Fund.
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