Exchange-rate-based inflation stabilization: the initial real effects of credible plans

Article Abstract:

An inflation model, based on small open economy, has been developed to analyze the stylized facts concerning exchange-rate-based stabilization programs. Unlike other models, the proposed framework generates substantial shoe-leather costs and allows the accumulation of physical capital. The model can further be modified using data restrictions from the Argentine Convertibility Plan in order to anticipate trade balance deterioration, exchange rate appreciation and consumption expansion.

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Hysteresis in a simple model of currency substitution

Article Abstract:

A cash-in-advance model of currency substitution in was created to evaluate the observed occurrences concerned with money demand and inflationary finance. The proposed model suggests that money velocity exhibits hysteresis in the fact that a momentary increase in expected inflation can result in a lasting increase in velocity. Smaller fluctuations in expected inflation have also been seen to have more lasting effects on money velocity in dollarized economies.

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Price level determinacy and monetary policy under a balanced-budget requirement

Article Abstract:

Factors affecting price levels are examined, as is the impact of monetary policy when the budget has to be balanced.

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