Stein, Ernesto H.; Streb, Jorge M.; Ghezzi, Piero - In: Economics and Politics 17 (2005) 3, pp. 297-330
We develop the implications of devaluation cycles for real exchange rates in a two-sector small open economy with a cash-in-advance constraint. Policy-makers are office-motivated politicians. Voters have incomplete information on the competence and the opportunism of incumbents. Devaluation acts...