Exchange-Rate-Based Stabilization

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Exchange-Rate-Based Stabilization

Ades, Kiguel & Liviatan, 1993.

In high inflation economies exchange-rate-based stabilizations typically start with a boom, with the recession coming later. In contrast, in similar programs in the moderate inflation European economies, the recession generally appears upfront. When such programs result in a boom, it is driven by different forces than in the high inflation economies.