Testing for Credibility Effects

Author/Editor:

Pierre-Richard Agénor ; Mark P. Taylor

Publication Date:

November 1, 1991

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:

This paper examines some recent techniques designed to draw inferences about the credibility of changes in macroeconomic policy regimes. An alternative two-step approach, based on the decomposition between permanent and transitory components of a "credibility variable" is proposed. The methodology is then used to test for the existence of a credibility effect in the Cruzado stabilization plan implemented in Brazil in 1986.

Series:

Working Paper No. 91/110

Notes:

Also published in Staff Papers, Vol. 39, No. 3, September 1992.

English

Publication Date:

November 1, 1991

ISBN/ISSN:

9781451853254/1018-5941

Stock No:

WPIEA1101991

Format:

Paper

Pages:

33

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