Template-Type: ReDIF-Article 1.0

Author-Name: Enrique Kawamura
Author-Workplace-Name: Universidad de San Andres

Title: A note on the credibility of Bank-Run-Preventing Devaluation policies

Abstract: In this note I provide a notion of a credible devaluation policy in the context of the Chang and Velasco (2000) model. I show that when the long term asset is illiquid enough a flexible exchange rate policy is credible.  It is also shown that there exists a non-trivial range for the liquidation value of the long term investment technology for which the same policy is not credible. Finally I propose a different flexible exchange rate regime which is shown to be credible. 

Classification-JEL: G21, G28

Journal: Económica
Pages: 51-67
Volume: XLVIII
Issue: 1-2
Year: 2002
Month: January-December 

File-URL: https://revistas.unlp.edu.ar/Economica/article/view/8515/7063
File-Format: Application/pdf
Handle: RePEc:akh:journl:527