Large devaluations and the real exchange rate
By: Ariel Burstein, Martin Eichenbaum, Sergio Rebelo.
Contributors: Eichenbaum, Martin S.; Rebelo, Sergio.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10986; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10986.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Devaluation of currency.; Foreign exchange rates.
Description: "In this paper we argue that the primary force behind the large drop in real exchange rates that occurs after large devaluations is the slow adjustment in the price of nontradable goods and services.  Our empirical analysis uses data from five large devaluation episodes: Argentina (2001), Brazil (1999), Korea (1997), Mexico (1994), and Thailand (1997).  We conduct a detailed analysis of the Argentina case using disaggregated CPI data, data from our own survey of prices in Buenos Aires, and scanner data from supermarkets.  We assess the robustness of our findings by studying large real-exchange-rate appreciations, medium devaluations, and small exchange-rate movements"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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