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Inflation and Exchange Rate Regimes in Mexico

Li, Carmen A and Philippopoulos, A and Tzavalis, E (1998) Inflation and Exchange Rate Regimes in Mexico. Working Paper. Exeter University, Department of Economics, Discussion Papers, Exeter.

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We present a version of the exchange-rate regime model of inflation. We then use quarterly data from Mexico during 1946-1995 to test and estimate a simultaneous equation model for wage inflation, price inflation and industrial produciton. In doing so, we respect the Lucas critique and take into account the statistical properties of the data. The main empirical finding is that after the fall of the fixed exchange rate regime in 1976, there is a Barro-Gordon type inflation bias due to the inability of policy-makers to commit to low inflation.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Exchange Rate ; Inflation ; Employment ; Mexico
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 08 Aug 2012 16:02
Last Modified: 08 Aug 2012 16:02

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