Inflation Stabilization: The Experience of Israel, Argentina, Brazil, Bolivia and Mexico (The MIT Press) - Hardcover

Bruno

Hardcover

ISBN 10: 0262022796 ISBN 13: 9780262022798

Publisher: MIT Press, 1988

Synopsis

Rampant inflation is a major economic problem in many of the less developed countries; two out of three attempts to stabilize these economies fail. Inflation Stabilization provides a valuable description and a critical analysis of the disinflation programs introduced in Argentina, Bolivia, Brazil, and Israel in 1985-86, and discusses the possibility of such a program in Mexico. It documents the initial steps in stabilization as well as the reasons for failure.As architects of the programs, several of the authors are in key positions to assess which aspects were critical in getting the programs accepted and where to look for difficulties and failures.In Israel, inflation was halted without recession. The challenge to policy makers today is in shifting from stabilization to the revival of sustained growth. This experience is described fully by Michael Bruno and Sylvia Piterman, who examine the critical issue of exchange rates, and by Alex Cukierman, who uses modeling to analyze the interaction of money, wages, prices, and activity under rational expectations that take the government's policy objectives into account.Endemic inflation and a sudden increase in external debt burden Argentina's economy, raising the wider issues of high inflation economies and stabilization that are discussed in the chapter by Jose Luis Machinea and that by Guido Di Tella and Alfredo Canavese.Eduardo Modiano and Mario Simonsen take up issues of wages in Brazil, particularly the problem of finding an equitable way to deal with a wage freeze; Simonsen develops an ambitious game theoretic rationalization of incomes policy as a coordinating device for imperfectly competitive economies.Bolivia did reach hyperinflation (price increases of more than 50 percent each month) before stabilizing. Juan Antonio Morales shows how stabilizing the exchange rate, in an economy where all pricing was already geared to the dollar, achieved stabilization without a wage or price freeze. And Francisco Gil Diaz asks whether an incomes-policy based program could work to control ever increasing inflation in Mexico.

About this title

About the Author:

Michael Bruno is Governor of the Bank of Israel and Professor of Economics at Hebrew University in Jerusalem. Guido Di Tella is a Fellow of St. Anthony's College, a Professor at the Di Tella Institute in Buenos Aires, and a Member of Parliament in Argentina. The late Rudiger Dornbusch was Professor of Economics at the Massachusetts Institute of Technology. Stanley Fischer is former Governor of the Bank of Israel and has been nominated as Vice Chair of the Federal Reserve]. He is the author of IMF Essays from a Time of Crisis: The International Financial System, Stabilization, and Development (MIT Press).

Synopsis:

Papers and comments presented at a conference on [title] held in Toledo, Spain, June 1987. They describe and analyze the disinflation programs introduced in 1985-86, and discuss the possibility of such a program in Mexico. Acidic paper. Annotation copyright Book News, Inc. Portland, Or.

About this edition

• Publisher: MIT Press
• Publication date: 1988
• ISBN 10: 0262022796
• ISBN 13: 9780262022798
• Binding: Hardcover
• Number of pages: 434