To make high-quality research more accessible and easier to explore.

Fields:
11 results

A Monetary Approach to the Crawling-Peg System: Theory and Evidence

Journal of Political Economy 1981 89(1), 132-151 open access
This paper develops and estimates a model of the joint determination of the exchange rate, international reserves, and the rate of inflation under a crawling-peg system. The framework presented, which is an extension of previous work on the monetary approach, generates short-run deviations from purchasing power parity that occur simultaneously with movements in both international reserves and the exchange rate. The model is estimated by full-information maximum likelihood on the basis of quarterly data for Brazil.