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Tuesday, July 28, 2020 | History

2 edition of Money-based versus exchange-rate-based stabilization found in the catalog.

Money-based versus exchange-rate-based stabilization

Ari Aisen

Money-based versus exchange-rate-based stabilization

is there space for political opportunism?

by Ari Aisen

  • 88 Want to read
  • 10 Currently reading

Published by Internation Monetary Fund, Western Hemisphere Dept. in [Washington D.C.] .
Written in English

    Subjects:
  • Economic stabilization -- Econometric models.,
  • Foreign exchange rates -- Econometric models.,
  • Inflation (finance) -- Econometric models.,
  • Elections.

  • Edition Notes

    StatementAri Aisen.
    SeriesIMF working paper -- WP/04/94
    ContributionsInternational Monetary Fund. Western Hemisphere Dept.
    The Physical Object
    Pagination35 p. ;
    Number of Pages35
    ID Numbers
    Open LibraryOL21640890M

    which distort economic activity and jeopardize the stabilization effort: The miracle of ERBS turns into a mirage. Keywords: Exchange Rate Based-Stabilization, Currency Crises, Inflation Stabilization, Emerging Economies ii. Money-Based Versus Exchange Rate-Based Stabilization. Where the misalignment in the real exchange rate is large, the usual conclusion is to realign the nominal exchange rate, but when the misalignment is small, the answer is not as clear-cut.

    Cydney Grannan was an Editorial Intern at Encyclopædia Britannica. She received her B.A. in English from the University of Chicago in The dwindling amount of gold resources forced the U.S. to give up any gold-controlled standard, and the international monetary system began to be based on the. The difference between an exchange-rate-based stabilization (ERBS henceforth) and a money-based stabilization formally lies in the selection of the nominal anchor: the exchange rate or a monetary aggregate. However, the consequences of the choice of the.

    This work suggests that choosing the exchange rate as the nominal anchor may allow countries to avoid (or at least postpone) the output contraction that typically follows so-called "money-based" stabilization programs.(1) The purpose of this paper is to analyze the experience with ERBS in four moderate-inflation Western European countries to. Under an exchange-rate-based stabilization, the costs would be paid later (recession later). The experience of the Southern-Cone programs also led some observers to argue that a single nominal anchor might not be enough to ensure a quick disinflation as problems of credibility, backward-indexation, and non-synchronized price setting would.


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Money-based versus exchange-rate-based stabilization by Ari Aisen Download PDF EPUB FB2

Money-Based Versus Exchange-Rate-Based Stabilization: Is there Space for Mr. Ari Aisen Limited preview - Money-Based Versus Exchange-Rate-Based Stabilization: IsIssues Money-based versus exchange rate-based stabilization with endogenous fiscal policy.

Cambridge, MA: National Bureau of Economic Research, © (OCoLC) Material Type: Internet resource: Document Type: Book, Internet Resource: All Authors / Contributors: Aaron Tornell; Andrés Velasco; National Bureau of Economic Research.

Money-based versus exchange rate-based stabilization with endogenous fiscal policy. Downloadable. In response to high and chronic inflation, countries have adopted different stabilization policies. However, the extent to which these stabilization programs were designed for political motives is not clear.

Since exchange-rate-based stabilizations (ERBS) create an initial consumption boom followed by a contraction, whereas money-based stabilizations (MBS) generate a consumption.

Money-Based vs. Exchange-Rate-Based Stabilization: Is There Room for Political Opportunism. Article (PDF Available) in IMF Staff Papers 54(2). Downloadable.

We present a standard intertemporal model in which fiscal policy is determined by an optimizing but non-benevolent fiscal authority.

If the fiscal authority is impatient, a money-based stabilization provides more fiscal discipline and higher welfare for the representative agent than does an exchange rate-based stabilization.

Data for Latin American stabilizations in the last. If the policy maker is impatient, a money-based stabilization provides more discipline, and higher welfare for the representative agent, than does an exchange rate-based stabilization. View Show. Exchange-Rate-Based Stabilization: A Critical Look at the Stylized Facts A.

JAVIER HAMANN* Do exchange-rate-based stabilizations generate distinctive economic dynamics. To address this question, this paper identifies stabilization episodes using criteria that differ from those in previous empirical studies of exchange-rate-based stabi-lizations.

1. Introduction. Contrary to the conventional wisdom that inflation stabilization has short-run contractionary effects, empirical studies focusing on chronic inflation countries have shown that exchange rate-based stabilization plans (ERBS) often lead to an initial expansion in economic activity, particularly in output and consumption, with recession occurring later on.

Money-Based Versus Exchange-Rate-Based Stabilization: Is There Space for Political Opportunism?, Working Paper No. 04/94, J Other Published Materials "Political Instability and Growth in Nepal, Selected Issues Paper, January   In Latin America and elsewhere in the last quarter-century, it is hard to find a country that undertook and exchange rate-based stabilization while still suffering from a fiscal problem and managed to correct this problem in the course of the program.

The same is not true of countries that undertook money-based stabiliza- tion programs. Exchange-rate-based stabilization in Argentina and Chile: a fresh look (Английский) Аннотация. Exchange-rate-based stabilization is designed to reduce inflation by using the exchange rate as the main nominal anchor.

This does not necessarily mean a fixed exchange rate. Orthodox Money-Based Stabilization (Ombs) Versus Heterodox Exchange Rate-Based Stabilization (Herbs): The Case of Russia, the Ukraine and Kazakhstan.

ECONOMIC SYSTEMS, Vol 21 No 1, March Posted: 7 Apr See all articles by Peter Bofinger Peter Bofinger. Money-Based vs. Exchange Rate-Based Stabilization with Endogenous Fiscal Policy,” (). Nominal Interest Rates, Consumption Booms and Lack of Credibility: A Quantitative Examination,”.

Money-Based Versus Exchange Rate-Based Stabilization with Endogenous Fiscal Policy By Aaron Tornell and Andres Velasco Download PDF (1 MB).

Get this from a library. Money-based versus exchange-rate-based stabilization: is there space for political opportunism?. [Ari Aisen; International Monetary Fund.

Western Hemisphere Department,] -- In response to high and chronic inflation, countries have adopted different stabilization policies.

However, the extent to which these stabilization programs were designed for political motives is. Money-Based versus Exchange Rate-Based Stabilization with Endogenous Fiscal Policy Aaron Tornell, Andres Velasco. NBER Working Paper No. Issued in October NBER Program(s):International Finance and Macroeconomics.

We present a standard intertemporal model in which fiscal policy is determined by an optimizing but non-benevolent fiscal. Because exchange-rate-based stabilizations (ERBS) create an initial consumption boom followed by a contraction, whereas money-based stabilizations generate a consumption bust followed by a recovery, policymakers may take into account the timing of elections when determining the nominal anchor for stabilization.

Money-Based vs. Exchange-Rate-Based Stabilization: Is There Room for Political Opportunism. Ari Aisen Pages Download PDF (KB) View Article.

With money-based stabilization, lower credibility reduces the benefits (i.e., inflation falls by less) but the real effects tend to vanish as well.

With exchange rate-based stabilization, lower credibility also reduces the benefits (inflation may even increase) but the real disruptions are magnified.

Note that Hungary has not been included in Table as either a case of money-based or exchange rate based stabilization for two reasons. First, inflation in Hungary was never very high, hovering between 5 percent and 15 percent a quarter inand stabilization attempts in did not make much of a difference.

In response to high and chronic inflation, countries have adopted different stabilization policies. However, the extent to which these stabilization programs were designed for political motives is not clear. Because exchange-rate-based stabilizations (ERBS) create an initial consumption boom followed by a contraction, whereas money-based stabilizations generate a consumption bust followed .exchange rate arrangements in the earlier phase of the transition process—money vs.

exchange rate based stabilization debate—and the appropriateness of the exchange rate arrangements (in the aftermath of the stabilization) for long-run economic management.

Second, one needs to.