What Happens When Countries Peg Their Exchange Rates? (The Real Side of Monetary Reforms) / Sergio Rebelo.

Format:

Book

Author/Creator:

Rebelo, Sergio.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w6168.

NBER working paper series no. w6168

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

What Happens When Countries Peg Their Exchange Rates?

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1997.

Summary:

There is a well-known set of empirical regularities that describe the experience of countries that peg their exchange rate as part of a macroeconomic adjustment program. Following the peg economies tend to experience an increase in GDP, a large expansion of production in the non-tradable sector, a contraction in tradables production, a current account deterioration, an increase in the real wage, a reduction in unemployment, a sharp appreciation in the relative price of non-tradables and a boom in the real estate market. This paper discusses how the changes in the expected behavior of fiscal policy that tend to be associated with the peg can contribute to explaining these facts.

Notes:

Print version record

September 1997.