Comparing the Welfare Costs and the Initial Dynamics of Alternative Temporary Stabilization

Uribe, Martin
January 1996
Working Papers -- U.S. Federal Reserve Board's International Fin;1996, p1
Working Paper
Working Paper
This paper compares the welfare costs and initial dynamics of three alternative inflation stabilization policies using the price model with imperfect credibility and currency substitution. The author addresses this issue by performing welfare comparisons in the basic framework developed by Calvo and Vegh. This structure succeeds in reproducing the 'recession now versus recession later' empirical regulatory with other facts associated with exchange rate based money based stabilization programs. This working paper can be found at the US Federal Reserve Board's International Finance Discussion Papers. You can access this by going to


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