Why Are Rates of Inflation So Low After Large Devaluations?

This paper studies the behavior of inflation after nine large post-1990 contractionary devaluations. A salient feature of the data is that inflation is low relative to the rate of devaluation. We argue that the distribution costs and substitution away from imports to lower quality local goods can account quantitatively for the post-devaluation behavior of prices.

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Year of publication:	2002-01
Authors:	Burstein, Ariel ; Eichenbaum, Martin ; Rebelo, Sergio T.
Institutions:	University of Rochester - Center for Economic Research (RCER)
Subject:	inflation \| devaluation \| exchange rates

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Extent:	application/pdf
Series:	RCER Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 486 52 pages
Classification:	F31 - Foreign Exchange
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005504047