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While inflation slowed sharply in Mexico during 1988, imports surged. Although the growth of domestic absorption could …
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in absolute terms and as a fraction of real economic activity. Empirical results using data for Mexico, Chile, Argentina …, and Israel support a negative statistically significant relationship between credit and inflation for Mexico, Argentina …, and Chile, but not for Israel. In addition, for both Chile and Mexico, dummy variables representing periods of inflation …
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Comparing the 1978-82 Uruguayan stabilization with the 1990-94 Mexican experience reveals that exchange rate based stabilization tends to increase the economy’s vulnerability to unexpected shocks. An exchange rate rule, with full capital mobility, can only succeed if compatible financial...
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