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.

MoreLess

Year of publication:	2003
Authors:	Burstein, Ariel ; Eichenbaum, Martin ; Rebelo, Sergio
Publisher:	Budapest : Hungarian Academy of Sciences, Institute of Economics
Subject:	inflation \| devaluation \| exchange rates

More details

Series:	IEHAS Discussion Papers ; MT-DP - 2003/8
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	872570290 [GVK] hdl:10419/108052 [Handle] RePEc:has:discpr:0308 [RePEc]
Classification:	F31 - Foreign Exchange
Source:	EconStor

Persistent link: https://www.econbiz.de/10010494298