01858cas a2200253 a 4500 AALejournalIMF000146 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451955545 1018-5941 BD-DhAAL BD-DhAAL Blejer, Mario. Deja Vu All Over Again? : The Mexican Crisis and the Stabilization of Uruguay in the 1970's / Mario Blejer, Graciana Castillo. Washington, D.C. : International Monetary Fund, 1996. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Comparing the 1978-82 Uruguayan stabilization with the 1990-94 Mexican experience reveals that exchange rate based stabilization tends to increase the economy's vulnerability to unexpected shocks. An exchange rate rule, with full capital mobility, can only succeed if compatible financial policies are strictly adhered to--even when severe negative shocks take place--and if reliance on persistent capital inflows is not essential. This requires monetary restraint, even under serious recessionary conditions, and tight fiscal policies to moderate interest rates. The epilogues of both experiences demonstrate that abandoning the exchange rate rule in the wake of a shock, even if inevitable, makes future stabilization more difficult. Mode of access: Internet Castillo, Graciana. IMF Working Papers; Working Paper ; No. 1996/080 Full text available on IMF http://elibrary.imf.org/view/journals/001/1996/080/001.1996.issue-080-en.xml IMF e-Library