Journal of Political Economy Vol. 89 No. 1 1981
A Monetary Approach to the Crawling-Peg System: Theory and Evidence
open access
Abstract
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.
- DOI
- 10.1086/260954
- Volume
- 89
- Issue
- 1
- Pages
- 132-151
- Language
- en
- Sources
- openalex crossref