We present a standard intertemporal model in which fiscal policy is determined by an optimizing but non-benevolent fiscal authority. If the fiscal authority is impatient, a money-based stabilization provides more fiscal discipline and higher welfare for the representative agent than does an...

This paper reviews the experience of Latin American countries with structural reforms, and discusses the relationship between macroeconomic stabilization and trade liberalization programs undertaken in the region since the early 1980s. The problem of sequencing of stabilization and structural...

This paper analyzes the relationship between exchange rates, inflation and disinflation in Latin America. The analysis concentrates on two central issues. First, the historical experience with fixed exchange rates in four Latin American countries is investigated. It is shown that even though...

This paper discusses the regressive nature of the inflation tax and she limited extent of its impact on those individuals below the poverty line. It also argues that inflation affects poverty mainly through its impact on real wages: the empirical evidence shows that wages increase more slowly...

This paper investigates the forward-lookingness of monetary policy related to stabilising inflation over time under different degrees of central bank credibility in the four largest Latin American economies, which experienced a different transition path to the full-fledged inflation targeting...

The paper investigates Celso Furtado's role in the controversy between structuralists and monetarists about inflation and stabilization, which took place in Latin America between the mid 1950s and early 1960s. Furtado was the first to relate Latin American chronic inflation to the new growth...

The initial stages of exchange rate-based stabilizations have been generally characterized by a consumption boom, a deterioration of the trade balance and the current account, and an appreciation of the real exchange rate. It is only at the later stages that the economy falls into recession. Tax...