01971cas a2200253 a 4500 AALejournalIMF000196 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451852219 1018-5941 BD-DhAAL BD-DhAAL Vegh Gramont, Carlos. Disinflation and the Recession-Now-Versus-Recession-Later Hypothesis : Evidence From Uruguay / Carlos Vegh Gramont, Willy Hoffmaister. Washington, D.C. : International Monetary Fund, 1995. 1 online resource (46 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 Both analytical models and casual empiricism suggest that the timing of the recessionary costs associated with inflation stabilization in chronic inflation countries may depend on the nominal anchor which is used. Under money-based stabilization, the recession occurs at the beginning of the program, while under exchange rate-based stabilization the recession occurs later in the program. This paper provides a first attempt to formally test this hypothesis using a vector-autoregression model for Uruguay. The impulse response of output to different stabilization policies is broadly consistent with the 'recession-now-versus-recession-later' hypothesis. The evidence also suggests, however, that the effectiveness of a monetary anchor in reducing inflation is hindered by the high degree of dollarization of the Uruguayan economy. Mode of access: Internet Hoffmaister, Willy. IMF Working Papers; Working Paper ; No. 1995/099 Full text available on IMF http://elibrary.imf.org/view/journals/001/1995/099/001.1995.issue-099-en.xml IMF e-Library