We estimate a dynamic, stochastic, general equilibrium model of the Brazilian economy taking into account the transition from a currency peg to inflation targeting that took place in 1999. The estimated model exhibits quite different dynamics under the two monetary regimes. We use it to produce...

The test case of "flexible versus fixed rates of exchange" has now been running for four months. Experience in this transitional and incipient phase has shown up a number of faults and impediments which are typical not only of the problems created by contemporary multicentric international...