IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-1-349-25520-7_5.html
   My bibliography  Save this book chapter

Adoption, Management, and Abandonment of Multiple Exchange Rate Regimes with Import Control: the Case of Venezuela

In: Parallel Exchange Rates in Developing Countries

Author

Listed:
  • Ricardo Hausmann

Abstract

In February 1983 Venezuela adopted a multiple exchange rate regime as part of a package designed to deal with a balance of payments crisis. The idea was to ease the process of adjustment to a lower level of oil income and financial flows, so as to avoid more drastic measures. Initially, the program generated a rapid improvement in the current account while maintaining relatively low inflation, but it produced a surprisingly high and growing exchange premium. On two occasions, in February 1984 and in December 1986, the government was forced to devalue the official rate, not because of insufficient reserves, but due to the unsustainable level of the exploding premium. In February 1989, after 6 years of experimentation — in which the parallel exchange rate depreciated by a factor of 10 — and in the midst of a new balance of payments crisis, the government decided to abandon the regime and adopt a unified floating arrangement. This change was followed by a 9 percent drop in GDP and by a 60 percent jump in the price level.

Suggested Citation

  • Ricardo Hausmann, 1997. "Adoption, Management, and Abandonment of Multiple Exchange Rate Regimes with Import Control: the Case of Venezuela," Palgrave Macmillan Books, in: Miguel A. Kiguel & J. Saul Lizondo & Stephen A. O’Connell (ed.), Parallel Exchange Rates in Developing Countries, chapter 4, pages 145-187, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-25520-7_5
    DOI: 10.1007/978-1-349-25520-7_5
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Santiago Mosquera & Federico Sturzenegger, 2021. "Cepo para principantes," Working Papers 151, Universidad de San Andres, Departamento de Economia, revised Apr 2021.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-1-349-25520-7_5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.