Why is Inflation so Low after Large Devaluations?

This paper studies the behavior of inflationnafter 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 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:	2003-06
Authors:	Burstein, Ariel ; Eichenbaum, Martin ; Rebelo, Sergio
Institutions:	Közgazdaság-tudományi Intézet, Közgazdaság- és Regionális Tudományi Kutatóközpont
Subject:	inflation \| devaluation \| exchange rates

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Extent:	application/pdf
Series:	IEHAS Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 0308 56 pages
Classification:	F31 - Foreign Exchange
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005590066