TY  - JOUR
AU  - Rebelo,Sergio
TI  - What Happens When Countries Peg Their Exchange Rates? (The Real Side of Monetary Reforms)
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6168
PY  - 1997
Y2  - September 1997
UR  - http://www.nber.org/papers/w6168
L1  - http://www.nber.org/papers/w6168.pdf
N1  - Author contact info:
Sergio Rebelo
Northwestern University
Kellogg School of Management
Department of Finance
Leverone Hall
Evanston, IL  60208-2001
Tel: 847/467-2329
Fax: 847/491-5719
E-Mail: s-rebelo@northwestern.edu
AB  - There is a well-known set of empirical regularities that describe the experience of countries that peg their exchange rate as part of a macroeconomic adjustment program.  Following the peg economies tend to experience an increase in GDP, a large expansion of production in the non-tradable sector, a contraction in tradables production, a current account deterioration, an increase in the real wage, a reduction in unemployment, a sharp appreciation in the relative price of non-tradables and a boom in the real estate market.  This paper discusses how the changes in the expected behavior of fiscal policy that tend to be associated with the peg can contribute to explaining these facts.
ER  -