This article lays out the general economic principles of exchange rate policy and provides an overview of the four country cases that have been included in this special edition of the journal: Mexico, Brazil, Argentina, and Venezuela. Three main currency regimes are discussed: the fixed but...

The author begins by asking why Brazilian policymakers opted to target the exchange rate to stabilize inflation when this strategy had already failed in Mexico. The answer: It was no longer possible to accomodate the country's high inflation rate through the pervasive use of price indexation and...

Recently, a number of Latin American countries with high inflation and various kinds of imbalances have experienced disinflation stabilisation programmes. Brasil implemented in July 1994 the Real Plan - an exchange-rate-based stabilisation experiment. This paper revisites this experience...

The balance-of-payment crisis literature can offer the basis to understand the current economic turmoil in Brazil. According to the author's calculations, the real exchange rate requires a 15% to 20% devaluation so as to assure that the intertemporal balance-of-payments constraint is not...

This article assesses the impacts of Brazil's exchange-based stabilization plan (Plano Real) on the country's external financial fragility and discusses alternative exchange policies to overcome the external vulnerability. An index for external financial fragility is applied to a time series of...