TY - JOUR
T1 - High real interest rates in the aftermath of disinflation
T2 - Is it a lack of credibility?
AU - Kaminsky, Graciela L.
AU - Leiderman, Leonardo
PY - 1998/2
Y1 - 1998/2
N2 - High real interest rates have been observed in many countries for several months after the adoption of disinflation programs. While they may reflect primarily a liquidity crunch, high ex post real interest rates can also be explained in terms of an ex post error in inflation expectations that reflects a lack of credibility of the low-inflation policy. The latter hypothesis is tested using data for Argentina, Israel, and Mexico during the implementation of the stabilization programs in the mid-1980s.
AB - High real interest rates have been observed in many countries for several months after the adoption of disinflation programs. While they may reflect primarily a liquidity crunch, high ex post real interest rates can also be explained in terms of an ex post error in inflation expectations that reflects a lack of credibility of the low-inflation policy. The latter hypothesis is tested using data for Argentina, Israel, and Mexico during the implementation of the stabilization programs in the mid-1980s.
KW - Credibility crisis
KW - Currency crisis
KW - Stabilization programs
UR - http://www.scopus.com/inward/record.url?scp=0031902968&partnerID=8YFLogxK
U2 - 10.1016/S0304-3878(97)00062-X
DO - 10.1016/S0304-3878(97)00062-X
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AN - SCOPUS:0031902968
SN - 0304-3878
VL - 55
SP - 191
EP - 214
JO - Journal of Development Economics
JF - Journal of Development Economics
IS - 1
ER -