Schwartsman, Alexandre - In: Brazilian journal of political economy 19 (1999) 73, pp. 5-29
. According to the author's calculations, the real exchange rate requires a 15% to 20% devaluation so as to assure that the …: Covered interest parity implies high real domestic interest rates in order to finance the current account. Yet the existence … of a large budget deficit imposes objective limits on the use of interest rates as a means to defend the currency. (Rev …