The 1987 Mexican Disinflation Program : An Exchange-Rate-Based Stabilization?

Author/Editor:

Julio A. Santaella ; Abraham Everardo Vela

Publication Date:

March 1, 1996

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

We examine whether Mexico’s disinflation experience during 1987-94 fits a widely accepted set of stylized facts of exchange rate-based stabilization (ERBS), and relate it to theories put forward to account for the boom-recession business cycle associated with ERBS. A cursory look at Mexican data shows that the experience fits quite closely the theoretical predictions and the stylized facts of ERBS. However, the paper shows that there were some important differences and peculiarities of the Mexican case that deserve further study, especially regarding the role of the nominal anchor and the nature of the business cycle.

Series:

Working Paper No. 96/24

Subject:

English

Publication Date:

March 1, 1996

ISBN/ISSN:

9781451844092/1018-5941

Stock No:

WPIEA0241996

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

52

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