This paper studies the Mexican and Israeli experience with a target zone. The first part of the paper develops a model of exchange rate determination under a target zone regime with stochastic realignments, and examines the conditions under which the adoption of the target zone, instead of a...

Several stabilization attempts in the 1980s in Argentina and Brazil followed a two-stage approach. In the first stage, some partial and temporary measures were taken to achieve a very drastic fall in the inflation rate. In the second stage, which sometimes never materialized, the fiscal reform...