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The 1987 Mexican Disinflation Program: An Exchange-rate-based Stabilization?

Author

Listed:
  • Julio A. Santaella

    (Banco de México)

  • Abraham E. Vela

    (Banco de México)

Abstract

We examine whether Mexico’s disinflation experience during 1987-94 fits the widely accepted set of stylized facts of exchange-ratebased stabilization (ERBS) on inflation, the boom-recession business cycle, and the external sector. A cursory look at Mexican data shows that the experience fits quite closely the stylized facts of ERBS. However, the paper shows that there were some important differences and peculiarities of the Mexican case that deserve further study, especially regarding the role of the nominal anchor and the nature of the business cycle.

Suggested Citation

  • Julio A. Santaella & Abraham E. Vela, 2005. "The 1987 Mexican Disinflation Program: An Exchange-rate-based Stabilization?," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(1), pages 5-40, January-J.
    • Handle: RePEc:emc:ecomex:v:14:y:2005:i:1:p:5-40
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    File URL: http://www.economiamexicana.cide.edu/num_anteriores/XIV-1/01The_1987_Mexican.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    stabilization; disinflation; business cycle; nominal anchor;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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