نرخ واقعی ارز و تورم بر اساس ثبات در تبادل نرخ: بررسی تجربی

Numerous explanations have been advanced for why real exchange rates typically appreciate after the nominal exchange rate is stabilized, but few of them have been directly tested. This paper uses an error-correction model of Mexican inflation to decompose the real appreciation of the peso during 1988–1994 into that part attributable to the peso's initial undervaluation, that part explained by growing domestic demand, and that part attributable to backward-looking inflation. The results indicate that the effects of backward-looking inflation were highly transitory, but that both the expansion of domestic demand and the initial undervaluation of the peso were important in boosting domestic prices and, hence, appreciating the real exchange rate.