IMF Working Papers Volume 1999 Issue 132: Exchange-Rate-Based Stabilization: A Critical Look at the Stylized Facts (1999)

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Exchange-Rate-Based Stabilization: A Critical Look at the Stylized Facts

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Mr. A. J Hamann

Mr. A. J Hamann
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https://orcid.org/0000-0002-6363-0398

Series:: IMF Working Papers

Volume/Issue:: Volume 1999: Issue 132

Publication Date:: 01 Oct 1999

DOI:: https://doi.org/10.5089/9781451855364.001

ISBN:: 9781451855364

ISSN:: 1018-5941

Pages:: 28

Keywords:: WP; ERBS; exchange rate; ERBS syndrome; inflation stabilization; exchange-rate-based stabilization; stabilization episode; stabilization program; ERBS literature; inflation stabilization strategy; Inflation; Exchange rates; Current account balance; Exchange rate anchor; Real exchange rates; Africa; Sub-Saharan Africa

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Series:: IMF Working Papers

Volume/Issue:: Volume 1999: Issue 132

Language:: English

Publication Date:: 01 Oct 1999

DOI:: https://doi.org/10.5089/9781451855364.001

ISBN:: 9781451855364

ISSN:: 1018-5941

Pages:: 28

Keywords:: WP; ERBS; exchange rate; ERBS syndrome; inflation stabilization; exchange-rate-based stabilization; stabilization episode; stabilization program; ERBS literature; inflation stabilization strategy; Inflation; Exchange rates; Current account balance; Exchange rate anchor; Real exchange rates; Africa; Sub-Saharan Africa

Legal-disclaimer:: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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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 stabilizations. We find that, while some differences can be detected between exchange-rate-based stabilizations and stabilizations where the exchange rate is not the anchor, the behavior of important variables does not appear to differ—especially output growth, which is good in both cases. There is also no evidence that fiscal discipline is enhanced by adopting an exchange-rate anchor, or that there are any systematic differences in the success records of stabilizations that use the exchange rate as a nominal anchor and those that do not.

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IMF Working Papers

ISSN:: 1018-5941

Publisher:: International Monetary Fund

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