This paper models alternative policy responses to various sorts of disturbances-or "shocks"-to the steady-state path of a developing economy. Its objective is to arrive at some generalizations about appropriate credit and exchange rate policies. (One result, for example, focuses on the folly of...

The effects of the oil price shocks of the 1970s were critically contingent on the domestic arrangements that determined the incidence of the shocks--specifically whether labor income or capital income bore the brunt. This differed between the two shocks in some countries and differed between...

This paper analyzes the efficacy of alternative financial stabilization policies in response to disturbances from various sources. A model, appropriate to the institutional structure of a developing country, is estimated. The model is subjected to shocks from the domestic real economy, domestic...

This paper examines two questions: (a) What basket of currencies should a small developing country use as the exchange rate standard for its currency? and (b) When are discretionary changes of the value of its currency against the standard warranted? The exchange rate policy of a small,...

This paper examines stabilization policy options in an open, less developed economy that is subject to transitory shocks. Particular emphasis is given to exchange rate policy as an instrument of stabilization. It is shown by means of a simple model, in which the authorities seek to minimize...

This paper is concerned with the specification and estimation of a model of the world gold market. Two approaches to an understanding of the gold market are common. The first approach is to regard it as an ordinary flow market in which gold is traded for its intrinsic commodity value and buyers...

Countries differed in their adjustment to the commodity price shocks of the 1970s. In some countries there was little wage adjustment, so that the brunt of the terms-of-trade loss was borne by profits; in others greater wage adjustment allowed the term-of-trade loss to be distributed more evenly...

Recently, policymakers have been discussing the best basket peg for a country seeking stability in a world of generalized floating. This paper argues that the real exchange rate is the important policy variable and that, although exchange rate data are available daily, price data are available...