The 1987 Mexican Disinflation Program: An Exchange Rate-Based Stabilization?
52 Pages Posted: 15 Feb 2006
Date Written: March 1996
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.
JEL Classification: E3, E52, E65
Suggested Citation: Suggested Citation
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