TY  - JOUR
AU  - Krueger,Anne O.
TI  - Nominal Anchor Exchange Rate Policies as a Domestic Distortion
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5968
PY  - 1997
Y2  - March 1997
UR  - http://www.nber.org/papers/w5968
L1  - http://www.nber.org/papers/w5968.pdf
N1  - Author contact info:
Anne O. Krueger
Department of International Economics
SAIS, Johns Hopkins University
1740 Massachusetts Avenue NW
Washington, DC 20036
Tel: 202/587-3238
E-Mail: annekrueger@jhu.edu
AB  - This paper analyzes a nominal anchor exchange rate policy as a domestic distortion, in the tradition of international trade theory.  It is shown that, in addition to the problems of sustainability and exit pinpointed in the exchange rate literature, a nominal anchor exchange rate policy, while in force, drives a wedge between the domestic and the international intertemporal marginal rates of substitution. The welfare cost of the Mexican use of the nominal anchor exchange rate policy prior to December 1994 is then estimated.
ER  -