Stabilization, credibility and regime dependent real exchange rates

This paper studies a dynamic error correction model (ECM) highlighting the consequences of regime changes and of credibility on the performance of real exchange rates during stabilization. The analysis shows that the structural parameters of the ECM, from which an equilibrium real exchange rate is calculated, will be subject to structural breaks reflecting regime and credibility changes. Empirical evidence is presented on the Mexican 1988 and 1995 stabilization episodes.

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Year of publication:	2006-01-01
Authors:	Prazmowski, Peter A.
Institutions:	School of Economics, Kingston University
Subject:	equilibrium real exchanges rates \| inflation stabilization \| credibility \| regime changes \| ECM \| Mexico

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Extent:	application/pdf
Series:	Economics Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Economics Discussion Papers Number 2006-1 36 pages
Classification:	E31 - Price Level; Inflation; Deflation ; F31 - Foreign Exchange
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010943345