inflation and persistence in output. The key features of our model are those that prevent a sharp rise in marginal costs after …

This paper studies the behavior of inflation after nine large post-1990 contractionary devaluations. A salient feature … of the data is that inflation is low relative to the rate of devaluation. We argue that distribution costs and …

inflation and depreciation rates. We use a first-generation type model of speculative attacks which has four key features: (i … the crises; (iii) a portion of the government's liabilities are not indexed to inflation; and (iv) there are nontradable … account for the high rates of devaluation and moderate rates of inflation often observed in the wake of currency crises. We …