Real exchange rate targeting and macroeconomic instability

• 成果类型: Article
• 署名作者: Uribe, M
• 署名单位: University of Pennsylvania; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(02)00087-9
• 发表日期: 2003
• 页码: 137-159
• 关键词: real exchange rate targeting; Sunspot equilibria; ideterminacy

摘要

Using an optimizing model of a small open economy, this paper studies the macroeconomic effects of PPP rules whereby the government increases the devaluation rate when the real exchange rate-defined as the price of tradables in terms of nontradables-is below its long-run level and reduces the devaluation rate when the real exchange rate is above its long-run level. The paper shows that the mere existence of such a rule can generate aggregate instability due to self-fulfilling expectations. The result is shown to obtain in both flexible- and sluggish-price environments. (C) 2002 Elsevier Science B.V. All rights reserved.